Nippon India Large Cap Fund: Well Suited In All Conditions

A review of Nippon India Large Cap Fund

The surge in valuation within mid- and small-cap segments has sparked caution among investors, leading them to tilt their portfolio towards large-cap funds, which are considered relatively safer. Also, if you are new to equity investing, you can start investing with large-cap funds. Among these, Nippon India Large Cap Fund would be a good choice, whether you are a new or an existing investor. It has demonstrated consistent performance across market cycles, coupled with consistent management team. Fund manager Sailesh Raj Bhan has been at the helm since 2007.

Portfolio

The fund sticks to its mandate to invest 80 per cent in large-cap stocks and the rest in mid- and small-cap stocks based on the fund manager’s view. In terms of stock picking, it primarily invests in companies that are leaders or emerging leaders in their sectors, as well as those which have robust cash flows.

Bhan’s ability to pick fundamentally sound stocks and holding on to them for the long term has paid off well. He also picks up growth stocks at reasonable prices. The fund has been overweight on the banking sector in the last two years, maintaining over 20 per cent in the last two years. At present, it invests 26.31 per cent of its portfolio in banks, such as HDFC Bank, ICICI Bank and SBI, among others.

Performance

It has a long track record of superior performance and proven ability to protect against the downside better than its peers in times of market volatility. It has secured the top position in over the last five years and 10 years, with 21.50 per cent and 16.94 per cent returns, compounded annually, respectively.

To put this in perspective, if you had invested `1 lakh in this fund 10 years ago, your investment would be worth `4.78 lakh, while a monthly systematic investment plan (SIP) of `5,000 would have grown to `15.44 lakh during the same period. It has never given negative return on a yearly basis in the last 10 years.

OLM Take

Consistent performance and focused exposure to large-caps makes it well-suited for an investor’s core portfolio in all market conditions.

kundan@outlookindia.com