Bet­ting on Mar­ket Lead­ers Pays Off

Tata Large Cap Fund

The Economic Times - - Smart - PORT­FO­LIO CHANGE IN THE PAST SIX MONTHS

In the re­cent months, the val­u­a­tion gap be­tween large-sized and mid-sized com­pa­nies has been nar­row­ing. At present, the Nifty is trad­ing at price-to-earn­ings (PE) mul­ti­ple of 20.7, while BSE Mid­cap in­dex is trad­ing at PE mul­ti­ple of 25.8. Given this gap, there is an in­creas­ing fo­cus on buy­ing large-cap com­pa­nies. There are a few other rea­sons for in­ter­est in large caps. Large-size com­pa­nies have rel­a­tively bet­ter bal­ance sheets, es­tab­lished busi­ness mod­els, brands and mar­ket share and abil­ity to per­form rel­a­tively bet­ter in down­turn. Given these ad­van­tages and volatile mar­kets, it makes sense to be in­vested with large-cap schemes.

Among large-cap schemes, Tata Large Cap is one of the few which have high ex­po­sure to large caps and very min­i­mal ex­po­sure to small caps. Un­like most large-cap schemes, this scheme has close to 90% of its port­fo­lio in­vested in big com­pa­nies and less than 10% in mid­caps. Among the large caps, the scheme has ex­po­sure to com­pa­nies which pay high div­i­dends and have dom­i­nant mar­ket share in their re­spec­tive sec­tors. The scheme’s another dis­tin­guish­ing fac­tor is con­sis­tency of re­turns. In bull mar­kets, it has beaten its bench­mark by a con­sid­er­able mar­gins. But its re­turns have been not been con­spic­u­ously stu­pen­dous as some of its peers.

In­dian Oil Cor­po­ra­tion

Com­plete Ex­its

Ci­pla

HPCL

New En­trants

In­crease in Al­lo­ca­tion

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