Principal Asset Management launches a new fund offer (NFO) of Large Cap Fund. It is an open-ended equity scheme predominantly investing in large-cap stocks. The NFO is open for subscription and will close by the second week of October. Large Cap Fund scheme would allocate 80-85% of its corpus to the top 100 Indian large-cap stocks by market cap and actively invest up to 15% in US stocks which have a market cap higher than USD 50 billion. The main objective of the large-cap fund is to provide growth from Indian and US economies and depreciating currencies.
Sudhir Kedia will manage Principal Large Cap Fund. Anirvan Sarkar will manage Foreign investment. The benchmark of the fund would be against the composite index of the Nifty 100 Total Return Index (NIFTY100 TRI).
Bharat Ravuri (Managing Director, Principal Asset Management) said that Principal Large Cap Fund is the first large-cap fund in India that will allow investors to widen their scope of investment horizon and look into the investment opportunities provided by Large Cap Indian and US companies. This would benefit those who are expected to emerge stronger from the changing economic landscape and have higher growth and comparatively lower risk quotient. Investors can take advantage of market cycles in two different economies and partake in the returns of the companies in the United States when there is a globally diversified portfolio while also trying to mitigate the country risk.
Comparatively, large-cap funds have delivered better returns with lesser volatility over the long term. Research indicates that a composite index of 15% of the S&P 500 (INR) and 85% of the NIFTY100 Index outperform the Indian indexes in multiple trailing periods and has lower volatility. The allocation to US large-cap companies would comprise up to 15 stocks around 4 to 6 sectors and include stability. This would also include stability and high growth businesses with a global brand franchise, as said by Rajat Jain (Chief Investment Officer, Principal Asset Management) in a release.
Two unique facilities like SMART AND My Gain are offered by the Principal Large Cap Fund. The objective of SMART is to protect investors against a sharp fall in markets as it invests in a staggered manner to mitigate risks from timing the market, whereas, My Gain facilitates the investors to set a target rate of return and automatically shifts the appreciated amount to any Principle fund of their choice when the target rate is achieved.