WhiteOak Capital asset management company (AMC) on Wednesday launched an open-ended WhiteOak Large-Cap Mutual Fund with BSE100 TRI as its benchmark.
The new fund offer (NFO) will open for subscription from Nov 10-25, 2022. The open-ended equity scheme will invest 80 per cent of the assets in large-caps and 15 per cent in mid-caps.
Detailing the fund, Ramesh Mantri, fund manager and chief information officer (CIO) of WhiteOak, said ample opportunities exist for alpha generation in the large-cap space “through correct sizing and rigorous bottom-up stock selection process”.
Why Should You Invest In Large-cap Funds?
Large-cap companies are market leaders with diverse revenue streams, strong balance-sheet, and greater access to low-cost capital than mid- and small-caps. These advantages make them steadier during economic downturns.
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Large caps provide a cushion to your portfolio during market volatility, as they are less volatile than mid or small-caps. The recovery is also faster “because of their large size, revenue protection, better margin, and access to capital, said Prateek Pant, chief business officer (CBO) at WhiteOak Capital Management.
Large-caps also acquire innovative companies in mid and small-cap segments; thus, they provide more value when they harness their products and talent pool. They typically unlock value through spin-offs, carve-outs, or divestments.
Active Share To Increase Alpha
WhiteOak plans to focus on winning stocks to bump up alpha and generate higher returns than the benchmark index. To do that, it will actively pick stocks from the top 100 companies in the large-cap segment.
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Portfolio Breakdown
As per the norms set by the Securities and Exchange Board of India (Sebi ), a large-cap mutual fund must allocate at least 80 per cent of its assets to large-caps. WhiteOak plans to invest even higher in large-cap and around 15 per cent in mid-cap.
Selection Criteria
WhiteOak will focus on well-managed, scalable businesses for high returns, besides attention to company valuation and their ability to generate cash flows.
