Weekend Bytes
Large Caps: Big in Size, Huge in Potential!
What is Large Cap segment for Mutual Fund Schemes?
Large cap segment covers top 100 companies by market capitalisation as defined by SEBI and notified by AMFI. They account for ~70% of the total equity market capitalization of the listed universe.
What they offer?
- Exposure to the respective industry leaders and well-established businesses
- The segment is spread across 17 sectors, thus offering diversification
- Proxy for participation in India’s growth story
- Lesser volatility and higher liquidity as compared to mid and small cap segment
- Potential across business and market cycles
Why Invest in Large Caps?
- Historically, Large Caps have been consistent compounders over the long term with NIFTY 100 index delivering 13.6% CAGR over the last 19 years.
2. Large Caps have the potential to deliver returns in line with the NIFTY50 EPS growth and nominal GDP growth of the country. Thus large cap segment could be a proxy to participate in India’s growth story
3. NIFTY100 Index 1-year forward PE (valuations) are relatively reasonable
Given the current market volatility, along with relatively reasonable valuations in large-cap space and India’s strong domestic growth prospects, it may be an opportune time to consider allocating to large-cap funds via lump sum investments or SIPs.
HDFC Top 100 Fund, a large cap fund, with a track record of over 27 years can be considered for investment in the current market scenario. With a blend of GARP and Value coupled with the risk management framework, the Fund endeavours to offer consistent returns to investors over the medium to long term.
Views expressed herein involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied herein. The views explain general market trends in the securities market and are based on information already available in publicly accessible media. Stocks/Sectors referred are illustrative and should not be construed as an investment advice or a research report or a recommendation by HDFC Mutual Fund (“the Fund”) / HDFC Asset Management Company Limited (HDFC AMC) to buy or sell the stock or any other security covered under the respective sector/s. The Fund may or may not have any present or future positions in these sectors. Past performance may or may not be sustained in future. The Fund/ HDFC AMC is not indicating or guaranteeing returns on any investments. Readers should seek professional advice before taking any investment related decisions.
