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:
