Top Mutual Funds: Nippon India Large Cap Fund

Objective

This fund is mandated to invest at least 80 per cent of its assets in large-cap stocks at all times. Large-cap funds are suitable to be the core holdings in the portfolio of a conservative equity investor for long-term wealth creation.

Fund Highlights

1. Nippon India Large Cap Fund is Open-ended Large Cap Equity scheme which belongs to Nippon India Mutual Fund House.

2. The fund was launched on Aug 08, 2007.

Net Asset Value

1. The Current Net Asset Value (NAV) of the Nippon India Large Cap Fund as of 18 Jan 2022 is Rs 51.6558 for Growth option of its Regular plan.

2. Its trailing returns over different time periods are: 41.96% (1yr), 14.11% (3yr), 15.05% (5yr) and 11.7% (since launch). Whereas, Category returns for the same time duration are: 33.68% (1yr), 16.58% (3yr) and 16.06% (5yr).

3. The Nippon India Large Cap Fund currently holds Assets under Management worth of Rs 11279.24 crore as on Oct 31, 2021.

4. The expense ratio of the fund is 1.86% for Regular plan as on Oct 31, 2021.

5. Nippon India Large Cap Fund shall attract an Exit Load, "Exit load of 1% if redeemed within 7 days."

6. Minimum investment required is Rs 100 and minimum additional investment is Rs 100. Minimum SIP investment is Rs 100.

Asset Allocation & Portfolio Composition

1. The asset allocation of the fund comprises around 98.29% in equities, 0.0% in debts and 1.71% in cash & cash equivalents.

2. While the top 10 equity holdings constitute around 54.48% of the assets, the top 3 sectors constitute around 55.59% of the assets.

3. The fund largely follows a Growth oriented style of investing and invests across market capitalisations - around 84.06% in giant & large cap companies, 11.49% in mid cap and 4.44% in small cap companies.

 The fund has the majority of its money invested in Financial, Technology, Energy, Services, FMCG sectors. It has taken less exposure in Financial, Technology sectors compared to other funds in the category.

 The fund's top 5 holdings are in HDFC Bank Ltd., ICICI Bank Ltd., Reliance Industries Ltd., HCL Technologies Ltd., State Bank of India.

Dividends:

Dividends are added to the income of the investors and taxed according to their respective tax slabs. Further, if an investor's dividend income exceeds Rs. 5,000 in a financial year, the fund house also deducts a TDS of 10% before distributing the dividend.

Warning: Do not invest in this, or any other large-cap fund, if you need to redeem your investment in less than five years.

Taxability of earnings:

Capital gains

• If the mutual fund units are sold after 1 year from the date of investment, gains upto Rs 1 lakh in a financial year are exempt from tax. Gains over Rs 1 lakh are taxed at the rate of 10%.

• If the mutual fund units are sold within 1 year from the date of investment, entire amount of gain is taxed at the rate of 15%.

• No tax is to be paid as long as you continue to hold the units.

Fund Manager:

Sailesh Raj Bhan (Since Aug 2007), He also manages 3 open ended schemes for the fund house including Nippon India Multi Cap Fund and Nippon India Pharma Fund.

Expert Comment

This is a fund that invests in big companies. Compared to those that invest in smaller companies, this fund tend to fall less when stock prices fall. Therefore, they are more suited to conservative equity investors.

But invest in them only if you have an investment horizon of more than five years, and do so only through the SIP route.

When you invest for five years or more, you can expect gains that comfortably beat the inflation rate as well as returns of fixed income options. But be prepared for ups and downs in your investment value along the way.