Large cap fund and its benefits to investors!!

Most of the investors understand the importance of diversification through asset allocation, which means to balance out the risk and reward between the debt and equity. As investors have lot of different options to invest. A mutual fund plays a vital role at this time as funds are managed by professional as per the requirement of the investor. 

Large Cap funds in India are a kind of mutual fund which invests in large capitalized company as well as blue chip companies. The investors prefer to make investment in large cap fund in India as they are considered to have moderate risk.

The greatest advantage of adding large cap fund to portfolio is the stability they provide. Because large cap companies are so large and have a large reputation that there is less chances of going insolvent and they have the capabilities to survive through the tank period.  One of them is covered below:

UTI Equity Fund Growth Weekly Chart

 

UTI Equity Fund Growth is an open ended fund having eyes on large cap stocks and approximately 95% exposure to Equity instruments.

Portfolio Analysis: As per the sectoral holdings Banking/Finance have been most favored sector for this fund as it is contributing 29% to the entire portfolio followed by Technology and Pharma Sector. At stock level the fund has diversified holdings into 76 stocks with Top 5 stocks contributing 23.06% to the entire portfolio.   

Top Holdings and Sector Allocation for this fund are shown below - 

Top Holdings:

Company	PE	% Assets
HDFC Bank	24.57	6.70
Infosys	18.00	5.51
Indusind Bank	28.78	4.97
HDFC	21.64	4.87
Tata Consultancy Services	20.35	4.69

Sector Allocation and Returns:

Sector	%
Banking/Finance	29.67
Technology	13.28
Pharmaceuticals	12.89
Automotive	11.57
Engineering	5.85

Performance	Fund
1 Year	5.6
3 Year	21.0
5 Year	14.4

Risk Profile: This fund has complete exposure in Equity instruments hence we consider this fund as High Risk hence only Risk taking investors should invest in this fund once the corrective action gets complete.

In a nutshell, entering in this fund in staggered fashion would be advisable at current level. As this is a large cap fund combining this with other small cap, midcap or debt investments would help fetch good returns, balance portfolio and also provide the benefits of diversification.

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