Given that a large cap fund invests in stable, revenue and cash flow generating businesses which have large market share and resources to navigate tough times such as now, it is considered one of the relatively safer investment options in equity.
However, as an investor, you are not just looking at the category but also which fund stands out and delivers.
Over the years, the large cap category has seen huge churn in terms of best performers.
The masters of old times are no where in the scene today. The relatively newer fund houses have been capturing the space.
There is another trend apace now. Passively managed index funds are getting more mind share and money share from the investors.
Passsively managed funds are simple to understand and execute. But many investors are still not satisfied with index less expenses returns. They want more.
And hence the active strategies are still around with lion's share of investors assets. Take for example, Axis BlueChip Fund. On account of its recent years performance, it has quickly reached Rs. 14,500 crores of assets under management.
Mirae Asset Large cap Fund is also an investor favourite at Rs. 16,300 crores. ICICI Prudential Bluechip Fund (one of the older ones out there) is at Rs. 22,800 crores. (All figures as of June 30, 2020)
But what is different?
Mirae Asset Large Cap follows a diversified portfolio strategy (50+ stocks) including using allocation to mid caps to generate better returns.
Axis Bluechip follows a concentrated portfolio strategy (around 25 stocks) within bluechip large caps along with cash holdings. It has helped manage drawdowns better than peers and generate higher returns too.
However, in the large cap space there is another strategy that has got little attention so far and has the potential to do better in the long term.
I am not just talking about returns but also about the consistent execution of the strategy over a period of time.
It is not compared with any other large cap fund in the category because of its categorisation as Thematic (quant based). But for all practical purposes, it should be.
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