Benefits of investing in Large cap fund in recent economic Condition.

 Large Cap Funds are also known as Blue Chip funds that have a huge market capitalization. Companies, with a market capitalization of more than Rs 1000 crore are known large-cap companies. These stocks are less resilient and give stable returns. Large-cap funds are those mutual funds, which endeavour to provide capital appreciation by investing in stocks of blue-chip companies, there is a high chance for earnings and growth. Different mutual funds have different norms for listing companies as large-cap funds. New investor should start their investment journey with Large-cap funds on his portfolio as they have more potential for earning growth and immense profit with less volatility.

Best large-cap funds are those that invest in equity shares of companies who are into Top 100 as per AMFI classification. Large-cap companies are well-established venture with an excellent upward track record and vintage and also they typically have stable corporate governance practices. These corporate houses are always among the most highly observed in the market. They have generated wealth for their investors steadily over the long term.

Large-cap is a secure direction for those who want to take advantage of equity investments but do not want their returns to fluctuate more than the benchmark (i.e. Sensex or NIFTY). As they are financially stable, they are capable of withstanding downturn markets, though there’s a risk that the large-cap might underperform as compared to mid-cap or small-cap equity fund. In volatile times, it is best to invest in large cap funds.

Why Large Caps Now?

·         Many sectors and stocks are trading at cyclical  bottom

·         Development of vaccines has successfully announced by UK and USA  which can improve the economic growth outlook

·         35 out of 50 stocks in Nifty50 Index are still underrated.

·         Most of the valued stocks are trading below their average ever which is so attractive.

·         Surprisingly these cash rich Large caps companies have potential of growth in a good economic  environment

Which Large Caps to bet on?

·         Which meet SQL investment philosophy

·         Beneficiaries of formalization of the economy

·         Government Monetary policies in favors

·         Trading at cyclical bottom

·         Maximum macro headwinds and can reverse

·         Which belongs to sectors which are core to the economy

·         Can potentially attract global liquidity

Launching  ITI Large Cap Fund

·         Core part of the  portfolio with  stable  compounding  returns

·         When economy  rebounds big  companies  benefit a lot

·         Differential  valuations  provide great  opportunity for  stock picking

·        Category is  suitable for long  term wealth  creation and asset  allocation needs

Objectives of investing in Large cap in current Market Scenario

§  Large cap companies are big companies, with proven track record, strong cash flows, and are leaders in their respective sectors & businesses.

§  They are generally stable and can withstand business downturns and external shocks therefore they can sail through turbulent times quite easily.

§  Good quality large cap companies re-invent themselves and keep growing by adapting to the times.

§  Large cap stocks provide stability to the portfolio and can potentially compound your wealth over the long term with lesser volatility.

Risk-o-meter of Large Cap Fund:

how to invest in mutual fund and its classifications

 

Mutual Fund is an excellent Investment option for multiplying your retirement Corpus. Here we are going to discuss what are mutual Fund and its features. 

Now a day’s Mutual Fund is a popular financial vehicle that pools money from individuals and institutional investors for common investment objectives. The pooled investments are professionally managed by the Fund managers. They invest in different securities such as Stocks, Bonds, and money market instruments that are in line with investment Mandates. As the Fund managers have in-depth understanding of markets, so their intention is to provide optimum returns to the investor by their investment decision. Investors would be allocated the unit-based funds on the amount they invest.

 

Objectives:-

Each Mutual Fund has a different investment objective, which is set by Fund Manager before launching the scheme in the market.

Based on this objective, the Fund Manager selects financial securities for the fund. Thus, sets its return and risk expectation.

If Fund’s objective is income generation, then Fund Manager would invest most of the money in Debt and Liquid instruments. Because they are less risky and give inflation-adjusted returns. Whereas if the fund objective is wealth creation, then the fund manager would invest most of the money in Equity & Equity Related instruments. Because they are riskier, have the potential to beat inflation through returns.

Mutual funds are broadly divided on the basis of categorization. Which are as follows:-

·       Based on the Structure of Mutual Fund

Ø Open Ended fund:-Investor can buy & sell funds at any time.

Ø Close Ended Funds:-Investor can buy the fund once during the Offer period.

·       Based on Asset Class of Mutual Fund

Ø Equity Fund:-Invest mainly in stocks. So also known as Stock Fund.

Ø Debt fund: - Principally invest in fixed income securities like bonds and treasury bills etc.

Ø Gold Fund: - The type of mutual funds that directly or indirectly invest in gold reserves.

·       Based on the Risk-Return profile of Mutual Fund

Ø Equity Funds:-These funds invest in Equity & equity related Instruments. Such funds are so volatile in performance but in the long run, it will return good capital appreciation.

Ø Balanced Funds:-These funds include equity and debt both.

Ø Debt Funds

·       Based on Market capitalization in Equity fund.

Ø Large-cap:- Top 100 companies in terms of market capitalization are considering large-cap companies.

Ø Mid-cap:-Next 101st- 250th companies in term of market capitalization are considering mid-cap companies.

Ø Small-Cap:- 251st company onwards in terms of market capitalization are considering small-cap companies.

In a simple way, we can conclude what is mutual fund is

Ø Investing in Mutual Funds is generally much easier than buying or selling financial securities like stocks, bonds or money market instruments.

Ø Mutual funds are operated by professional ‘fund managers’. They invest the fund’s capital in various financial securities according to scheme objectives. Thus, attempting to generate capital gains and income for the fund’s investors. These Fund Managers are highly qualified individuals who invest your money based on huge backend research and analysis.

Ø All funds should be registered with the Securities and Exchange Board of India (SEBI). SEBI regulates securities markets before it can collect funds from the investor.

Ø Each investor owns units, which represent the percentage of the holdings of the fund. The income/gains generated from this collective investment which is distributed amongst the investors after deducting certain expenses, by calculating a scheme’s “Net Asset Value or NAV”.

Ø Simply put, it is one of the most viable investment options for the common man. Since it offers an option to invest in a diversified and well-managed basket of securities at a comparatively low cost.