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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