Nippon India Large Cap Fund: Consistent Across Market Cycles

Equity markets globally are going through volatility due to geopolitical developments, changing trade dynamics, and other factors. Amid this, investors look for safer pockets within equities, and large-cap funds tend to fit that bill. Companies that are part of the large-cap indices are typically well-established in their respective sectors, with strong balance sheets, diversified revenue streams, and proven management track records. These qualities help them withstand market stress better than smaller companies.

If you are exploring large-cap funds to start your equity investment journey or to diversify your portfolio, Nippon India Large Cap Fund could be worth considering, given its long-term track record. The consistency of its management team is also noteworthy. Its fund manager, Sailesh Raj Bhan, has been at the helm since 2007, providing stability to the fund’s investment philosophy, stock selection, and risk management during volatile phases.

Portfolio

The fund always sticks with its mandate to invest 80 per cent of its portfolio in large-cap stocks and the remaining 20 per cent in mid-and small-caps based on the fund manager’s view. Bhan’s ability to pick fundamentally sound stocks and holding them for the long term to realise the value has paid off well. He prefers investing in growth companies that are leaders or emerging leaders within their sectors, and those with robust free cash flows. The fund has consistently been overweight on the banking sector, with over 20 per cent in the last two years. Currently, this sector accounts for 24.02 per cent with heavyweights like HDFC Bank, ICICI Bank, Axis Bank and State Bank of India among its top five holdings.

Performance

The fund has delivered strong performance across market cycles, while protecting its downside better than its peers during volatile phases. Over the last five and 10 years, it has clocked compounded annual growth rates of 19.42 per cent and 16.41 per cent, respectively. Simply put, a monthly investment of Rs 5,000 through an SIP would have grown to Rs 14.39 lakh in the last 10 years.

This consistency in performance across market cycles and strong fund management makes this fund suitable for your core portfolio.

kundan@outlookindia.com