WEALTH CREATION WITH LARGE CAP FUNDS..

Large cap funds turn out to be the best investment option if the investment is made for the first time.  Large cap funds are those in where the major proportion of the investment is made in blue chip companies with a market capitalization value of more than $10 billion. It basically reflects the performance of the economy and the corrections are much less because they have huge resources to go through the bad market phase. However, they do not deliver exceptional results in the bulls market but meet minimum expectations of the investors with comparatively lower risk than smaller companies. One of the best examples is mentioned below:

 UTI Equity Fund Growth is an open ended fund having eyes on large cap stocks and approximately 98.13% exposure to Equity instruments.

Portfolio Analysis: As per the sectorial holdings Banking/Finance have been most favored sector for thisfund as it is contributing 33.60%  to the entire portfolio followed by IT  Sector.

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

 

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.

Technical Perspective:The weekly Chart for UTI Equity Fund Growth shows that post completion of wave 2 near 100, prices exhibited a sharp move on upside in form of wave iii. Also the 20 weeks EMA is now acting as support to the prices which indicate positivity in the trend. Prices have broken its multi-year blue channel indicating out performance of this fund. As long as support trendline is intact bias remains positive.

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, it is advisable to balance portfolio and also provide the benefits of diversification.

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HOW MNC MUTUAL FUNDS ARE DIFFERENT FROM OTHERS?

Mutual funds with a wide concentration on the Multinational Corporations are MNC funds. These theme based funds has done exceedingly well in past few years, as well as the top sector funds.

As the name suggest, MNC fund’s portfolio is loaded with pure MNC or Joint Venture stocks. The biggest advantage of investing in MNC is their Transparency in terms of management, Cash flows, Balance sheet and absences of Corporate Governance issues. MNCs were also assumed to be generally better and more professionally managed, clean corporate governance, and have easier access to newer technologies and additional capital.  These types of funds are made for the investor looking for less Volatility and Steady Returns from their portfolio.

The other advantage of these funds is that it doesn’t focus on any one sector and they are less risky as compared to sector funds. As previously told, investing for long is always beneficial for the investor. An Investor should invest in MNC funds for time horizon 3 to 5years for better rate of return. As these funds can perform in both bullish market as well as bearish market, experts believe there is more upside to these. One can take 20 percent exposure in these types of funds which should a cushion to the riskiest investments in other asset clases.

MNC funds can boost of stocks with mostly sound fundamentals, thought high price. Although they are thematic funds, they are more diversified than sector funds for one simple reason – they hold basket of sectors. In addition, they hold a basket of defensive and growth funds giving them an option to choose sector based on market condition.

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