4 Mutual Funds Schemes You Should Buy This Season

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oi-Sunil Fernandes

| Published: Sunday, November 8, 2020, 8:00 [IST]

The festive season is a good time to build your portfolio. In fact, investors can look at debt funds, thematic funds as well as largecap mutual funds. Here are 4 mutual fund schemes as recommended by IIFL for this season.

SBI Magnum ESG Fund

This scheme invests in companies which score across parameters from Governance, Social & Environmental (ESG) aspects of the company’s management of its affairs.

SBI Magnum ESG Fund invests 80-100% in equity & equity related instruments following ESG criteria and 0-20% is invested in other equities and/or debt & money market instruments.

Active weights of a security are determined by the ESG scores. As of September 2020, the fund had invested 87% of AUM in large cap stocks while 8% was invested in mid cap stocks. The fund had highest allocation to Banks (20.0%) followed by IT (16.7%). Its top stock holdings comprise of Infosys (9.8%), HDFC Bank (8.6%) and Reliance Industries (7.9%). Investors who prefer to invest in emerging themes rapidly gaining wider preference among the seasoned investors. This scheme is suitable for investors with high risk appetite and an investment horizon of 8-10 year

ICICI Pru Manufacture In India Fund

This scheme is again recommended by IIFL. ICICI Pru Manufacture In India Fund aims to generate long term capital appreciation by creating a portfolio that is invested predominantly in equity and equity related securities of companies engaged in manufacturing theme. The Scheme endeavors to invest in companies that are likely to benefit from the Government’s Make in India initiative.

As of September 2020, the fund had invested 68% of AUM in large cap stocks while 19% was invested in mid cap stocks. The fund had highest allocation to Refineries (22.5%) followed by Pharma (9.6%) and Aluminum (8.7%). Its top stock holdings comprise of BPCL (9.5%), Reliance (8.8%), and Hindalco (6.3%). Since thematic funds carry high risk, the scheme is suitable only for those investors who have high risk appetite and an investment horizon of 8-10 years

Mirae Asset Healthcare Fund

The investment objective of the scheme is to seek to generate long term capital appreciation through investing in equity and equity related securities of companies benefitting directly or indirectly in Healthcare and allied sectors in India.

Thus it aims to drive benefits from healthcare theme which has tremendous growth potential and includes businesses in hospitals, diagnostics, specialty chemicals, medical equipment, insurance and other allied sub sectors. The scheme endeavors to maintain a concentrated portfolio of 30-40 stocks

As of September 2020, the fund had invested 62% of AUM in large cap stocks while 26% was invested in mid cap stocks. Its top stock holdings comprise of Dr. Reddy’s Labs (11.3%), Sun Pharma (9.8%) and Divis Labs (8.0%).

The scheme is suitable for seasoned investors having high risk appetite and at least 7-8 years of investment horizon

UTI Equity Fund

The fund aims to generate long term capital appreciation by investing predominantly in equity and equity related securities of companies across the market capitalization. The scheme focuses on high quality businesses that have an ability to show strong growth for a long period of time and are run by seasoned managements.

The fund follows a bottom up stock selection with well defined metrics of free cash flows, capital efficiency and ability to compound earnings. As of September 2020, the fund had invested 63% of AUM in large cap stocks while 29% was invested in mid cap stocks. The fund had highest allocation to IT (15.0%) followed by Banks (12.9%). Its top stock holdings comprise of Bajaj Finance (6.0%), HDFC Bank (5.7%) and L&T Infotech (4.5%).

Investors who prefer to invest in a diversified portfolio of stocks can invest in this fund to create wealth in the long term. This scheme is suitable for investors with moderately high risk appetite and at least 5 years of investment horizon.

Courtesy: IIFL report

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