Hi wealthgainer.in, Today we are talking to large cap fund – “The Nippon India Large Cap Fund Direct Growth” is a well-established equity mutual fund that primarily focuses on large-cap companies. For investors seeking long-term capital appreciation, this fund provides an excellent opportunity by investing in the top 100 Indian companies by market capitalization. This article explores the key aspects of the fund, its growth potential, performance, and suitability for different types of investors.
What is Nippon India Large Cap Fund Direct Growth?
Nippon India Large Cap Fund Direct Growth is a part of the equity mutual fund category, focusing on large-cap companies with stable and reliable returns over time. The fund emphasizes investments in companies that are financially strong, highly liquid, and have a strong market presence.
Key Features of the Nippon India Large Cap Fund Direct Growth Fund
| Fund Category | Large Cap Equity |
|---|---|
| Fund Scheme | Open Ended Equity Scheme |
| Investment Philosophy | Focuses on long-term capital growth by investing in top 100 large-cap companies in India. |
| Launch Date | August 08, 2007 |
| Benchmark | BSE 100 TRI |
| Return Since Launch | 13.78% |
| Negative Coverage | There have been no significant negative news about the fund or AMC recently. |
| Regulatory Actions | No major regulatory actions against the AMC. |
| Number of Stocks in Fund | Approximately 60-65 large-cap stocks. |
| Total AUM | ₹12,000 Crore as of 2024. |
| Fund AUM % of AMC Total AUM | Around 9-10%. |
| NAV (Net Asset Value) | ₹99.55 as of October 2024. |
| Fund Manager | • Sailesh Raj Bhan (Fund Manager) (Since Aug 2007) • Bhavik Dave (Assistant Fund Manager) (Since Aug 2024). |
| Expense Ratio | 1.1% for the Direct Plan |
| Turnover Ratio | Approximately 35%, indicating moderate portfolio changes. |
| Riskometer | Very High. |
| Rank | 4 (In India) |
Rating
Investment Strategy
The fund invests in large-cap companies, targeting businesses that are:
- Market leaders in their respective sectors.
- Financially strong with robust cash flow.
- Consistent in delivering growth across various market cycles.
Why Large Caps?
- Stability: Large-cap companies are generally more stable and less volatile compared to mid or small-cap companies.
- Growth Potential: Large caps have a proven track record, making them ideal for long-term investors.
- Risk Management: The diversified portfolio of large companies helps in risk mitigation.
Fund Manager Details
[A] Fund Manager
1. Experience: Sailesh Raj Bhan has over 20 years of experience in equity management.
2. No. of Funds Managed: Manages 3 open ended funds scheme (Nippon India Pharma Fund, Nippon India Multi Cap Fund, Nippon India Large Cap Fund) across large-cap and sector-focused categories.
3. Tenure Managing This Fund: Shailesh Raj Bhan has been managing this fund for over 8 years.
| Fund Name | Dates |
|---|---|
| 1. Nippon India Pharma Fund | Since Jun 2004 |
| 2. Nippon India Multi Cap Fund | Since Mar 2005 |
| 3. Nippon India Large Cap Fund | Since Aug 2007 |
4. Track Record: Consistently outperformed the benchmark with impressive returns during volatile market conditions.
[B] Assistant Fund Manager
1. Experience: Mr. Bhavik Dave has been actively managing funds at Nippon India Mutual Fund since August 2024.
2. No. of Funds Managed: Currently manages 2 open-ended schemes, including sector-focused and large-cap funds.
3. Tenure Managing This Fund: Managing the Nippon India Large Cap Fund and Nippon India Banking & Financial Services Fund since August 2024.
4. Track Record: Demonstrated strong performance with impressive returns, as seen in the 1, 3, and 5-year returns of the Nippon India Banking & Financial Services Fund, outperforming the benchmark consistently.
Key Selection Criteria:
- Market Leadership
- Growth Consistency
- Robust Cash Flow
- Strong Financial Health
Performance Overview:
The Nippon India Large Cap Fund Direct Growth has consistently outperformed its benchmark over different time horizons.
Performance Comparison:
| Time Period | Fund Return (CAGR) | Benchmark Return (CAGR) |
|---|---|---|
| 1 Year | 18.45% | 15.30% |
| 3 Years | 21.10% | 17.80% |
| 5 Years | 22.16% | 18.45% |
| 10 Years | 14.7% | 12.8% |
2. 10 Years XIRR Returns: 14.3%.
3. 10 Years Rolling Returns: The fund has delivered rolling returns ranging between 10-16% over the past decade, ensuring stability.
Nippon India Large Cap Fund Direct Growth NAV Today (as of November 2024): ₹99.55.
Top 10 Holding in Nippon India Large Cap Direct Growth
| Holding Companies | Assets |
|---|---|
| HDFC Bank Limited | 9.56% |
| ICICI Bank Limited | 6.10% |
| Reliance Industries Ltd | 5.75% |
| ITC Ltd | 5.68% |
| Infosys Ltd | 4.63% |
| Larsen & Turbo Ltd | 3.84% |
| State Bank Of India Ltd | 3.66% |
| Axis Bank Ltd | 3.58% |
| Tata Power Company Ltd | 3.15% |
| Tata Consultancy Services Ltd | 2.85% |
Suitability and Risk Factors
Who Should Invest?
- Long-term Investors: Suitable for investors looking for stable returns over a 5 to 7-year horizon.
- Risk-averse Investors: Those who want relatively low-risk exposure to the equity market.
- Investors Seeking Diversification: It helps in diversifying the portfolio through exposure to various large-cap sectors.
Risk Factors:
- Market Risk: As an equity-based fund, it is subject to market fluctuations.
- Concentration Risk: Investments are primarily in large caps, limiting exposure to small and mid-cap companies.
| Risk Measure | Value | Interpretation |
|---|---|---|
| Sharpe Ratio | 0.9 | Indicates above-average risk-adjusted performance. |
| Capture Ratio | 1.1 | Shows it captures more upside than downside in market movements. |
| Maximum Drawdown | -22% | Reflects the worst loss during market declines. |
| Sortino Ratio | 1.2 | Indicates efficient management of downside risk. |
| Tracking Error | 1.8% | Reflects deviation from the benchmark. |
| Information Ratio | 0.4 | Shows moderate outperformance versus the benchmark. |
| Lemen’s Ratio | 0.9 | Validates the fund’s ability to manage risk effectively. |
| Standard Deviation | 12.3% | Indicates the fund’s market volatility. |
| Beta | 0.92 | Shows the fund is slightly less volatile than the overall market. |
Note – The above measures have been calculated using monthly rolling returns for 36 months period with 6.76% risk free return (FBIL Overnight MIBOR as on 30 September 2024).
Riskometer
This fund has Very High risk.
This Fund
As per SEBI’s Riskometer.
Nippon India Large Cap Fund Direct Growth Review
Strengths:
• Strong performance history.
• Consistent returns across market cycles.
• Low expense ratio due to direct plan benefits.
• Experienced fund management team.
Weaknesses
• Higher exposure to large caps limits aggressive growth potential.
• Short-term volatility in equity markets can impact returns.
Conclusion
The Nippon India Large Cap Fund Direct Growth is an excellent choice for long-term investors seeking a stable, large-cap equity investment. It offers consistent returns, high risk, and is managed by an experienced team.
The fund’s strong track record and efficient risk management make it a well-rounded option for conservative investors looking to build wealth over time.
Disclaimer – Before investing, ensure you understand your risk tolerance and consult with a financial advisor to make the best decision for your investment portfolio. This website does not Promote any investment or investment advice. This article is only for educational Purpose and not liable any profit or loss for your investment in mutual fund.
Source Of Data – Nippon India Large Cap Mutual Fund