The Nippon India Large Cap Fund—Growth, managed by Nippon India Mutual Fund, is a prominent large-cap fund with an NAV of around ₹82 as of May 24, 2024. The fund’s size is total 26,000 crore, representing 8.13% of the category’s investments. It has a Crisil rank of 1, indicating very good performance.
Suitability & Risk Ratios
This fund is suitable for investors looking to invest for at least 3–4 years with an expectation of high returns and a willingness to accept moderate losses.
- Standard Deviation (12): the returns usually fluctuate around 12 percentage points from the average.
- Beta (0.98): A beta of 0.98 indicates the fund’s returns are slightly less volatile than the market.
- Sharpe Ratio (1.44): 1.44 reveals the fund has provided good returns for the risk taken.
- Treynor’s Ratio (0.18): This indicates the fund has provided a return of 0.18 units for each unit of systematic risk.
- Jenson’s Alpha (6.4): An alpha of 6.4 suggests the fund has outperformed expectations by 6.4 percentage points.
Investment Strategy
The fund predominantly invests in stocks of the top 100 companies by full market capitalization, focusing on stability and liquidity. It aims to generate alpha by investing in leaders or potential leaders with established business models and sustainable free cash flows. The fund targets growth companies with a high return on equity and reasonable valuations, including emerging large-cap companies with proven management and potential for high cash flows.
Performance
Over the past decade, the Nippon India Large Cap Fund has etched its name in the annals of mutual fund history with its stellar performance.
1-Year Growth:
- In the past year alone, the Nippon India Large Cap Fund has showcased a remarkable growth rate of 42.59%. To put this into perspective, if an investor had invested ₹100,000 in the fund a year ago, their investment would have grown to approximately ₹142,590.
- Comparing this growth to industry benchmarks and category averages, the fund has outperformed its benchmark of 31.88% significantly, indicating its ability to capitalize on market opportunities and deliver superior returns to investors.
2-Year Growth:
- Over two years, the fund maintained its momentum, achieving a growth rate of 35.55%. This consistent performance underscores the robustness of the fund’s investment strategy and its ability to navigate market fluctuations effectively.
- A ₹100,000 investment made two years ago would have grown to approximately ₹135,550, highlighting the wealth creation potential of the fund over the medium term.
5-Year Growth:
- Looking at a more extended time horizon, the fund’s five-year growth rate stands at 26.3%. This sustained growth demonstrates the fund’s ability to generate wealth for investors over the long term, despite fluctuations in the market.
- A ₹100,000 investment made five years ago would have grown to approximately ₹126,300, showcasing the compounding effect of consistent returns over time while the 10-year rate has been 17.72%.
NAV Insights
The Net Asset Value (NAV) of the Nippon India Large Cap Fund is a reflection of its underlying assets and investment performance. With a current NAV of ₹82.3253, investors gain access to a well-structured portfolio that is carefully curated to maximize returns while managing risks effectively.
- Direct Growth Plan Bonus: ₹90.91 (-0.04%)
- Direct IDCW: ₹39.88 (-0.02%)
- Direct Growth Plan Growth: ₹90.91 (-0.04%)
- Institutional Growth Plan: ₹34.14 (+1.65%)
- Institutional Plan – Dividend: ₹13.54 (-0.18%)
- Institutional Plan – Growth: ₹12.95 (+0.39%)
- Growth Plan Bonus: ₹82.33 (-0.05%)
- IDCW: ₹26.42 (-0.05%)
- Growth Plan: ₹82.33 (-0.05%)
Fund’s investment portfolio
Managed by seasoned fund managers Mr Sailesh Raj Bhan and Mr Ashutosh Bhargava, the fund’s strategy revolves around identifying and investing in large-cap stocks of companies that exhibit robust fundamentals, sustainable growth potential, and a proven track record of performance. While Large Cap Stocks account for 66.31%, Mid-Cap are 12.8% and Small Cap Stocks, for 3.05%.
Here’s a glimpse into the fund’s top holdings:
HDFC Bank Ltd. (9.31%):
- A stalwart in the banking sector, HDFC Bank’s inclusion in the portfolio reflects the fund’s focus on quality companies with robust fundamentals and sustainable growth prospects.
Reliance Industries Ltd. (7.30%):
- Led by visionary entrepreneur Mukesh Ambani, Reliance Industries is a conglomerate with interests in petrochemicals, refining, telecommunications, and retail. Its presence in the fund’s portfolio underscores its significance as a key player in the Indian economy.
ICICI Bank Ltd. (6.47%):
- As one of India’s largest private sector banks, ICICI Bank’s inclusion highlights the fund’s emphasis on companies with strong cash flows, prudent risk management practices, and a track record of delivering shareholder value.
State Bank of India (6.04%):
- With its widespread presence and comprehensive range of banking services, the State Bank of India occupies a prominent position in the fund’s portfolio, reflecting its importance in the banking sector.
ITC Limited (5.84%):
- ITC Limited’s diversified business portfolio spanning FMCG, hotels, paperboards, packaging, and agri-business makes it a valuable addition to the fund’s portfolio, offering exposure to multiple sectors of the economy.
The allocation of the different industries and sectors was majorly composed of banks both private and public
Risk Management and Tax Efficiency
Amidst the pursuit of growth rigorous risk assessment, portfolio diversification, and prudent asset allocation are employed to safeguard investor capital and optimize returns.
Additionally, the fund offers tax-efficient investment avenues, with favourable tax treatment on long-term capital gains, enhancing its appeal to tax-conscious investors.
- LTCG: 10% if held for more than a year
- STCG: 15% if held for less than a year