Large Cap Funds – Dec 2021

Before I start off on any analysis in this segment, even at the cost of a repetitive bore I will put forth this disclaimer. All fund schemes are taken as direct. However, even if you are a direct investor, hire a financial advisor that you trust who can guide with investments. Pay for your advice.

Fund category definition: Funds with minimum 80% portfolio allocation to Large Cap (top 100 by market cap size) stocks

Benchmark: BSE 100 TRI or Nifty 100 TRI with latter giving a return of 2.08% in December 2021

Data as on: 31st December, 2021

Summary

It was a mixed bag in December in terms of performance with exactly half the funds giving slightly better returns than the benchmark.

By size, Mirae has now inched up to make it’s way in the top 3 funds of the category. However, the top four remain pretty much in the same range and they could just keep shuffling among each other.

Among the funds, HDFC seems to have gone shopping having increased it’s number of stocks from 51 to 57. As for the expense ratio, there ain’t any change worth talking about.

Market Cap Allocation

There is room for very little surprises in this category with a bulk of 80% reserved for a universe of mere 100 stocks. However, Axis makes a teeny weeny departure from being an all-Large Cap fund by way of Cholamandalam Investment and Finance now being recategorised as Mid Cap. On the other hand, inspired by ICICI, Franklin has added a sole US stock – Freshworks to give it a spritz of geographical diversification.

On the subject of equity exposure versus cash while funds like Axis and Canara Robeco have made a sizeable reduction in equity exposure (to the tune of 2-3%), HDFC and Franklin have made a move to increase their cash exposure by a similar magnitude.

Top 5 sectors

Banks and Software remain the two favourites for the fund category.

However, Finance seems to have seen some action this month. While for Aditya Birla, it moved down from second biggest to third biggest, in UTI it went from third largest to fifth largest. However, in Nippon, it made a comeback to third place. However, this could well be because of the 1.26% trimming from Bharti Airtel that’s been done to see Telecom not making it to top 5 for the fund.

In fact, telecom is not in the top 5 table at all while it made the list for three funds last month – ICICI, Nippon and Franklin. The main stock through which the sector is participated in is, you guessed it, Bharti Airtel. While it’s price fell by about 6%, across funds there is quite a cutting down of it’s allocation leading to it not being in the top five for all three funds seen last month.

Pharma as a sector now knows you win some, you lose some as it finds an exit from top 5 in Franklin and an entry into ICICI. In Franklin, the exit comes thanks to a complete exit from Lupin.

Franklin is seeing quite a shuffle in terms of sectors yet again. This time, Consumer Non Durables or FMCG gets a boost with the addition of 1.87% allocation to Godrej Consumer Products. With that, the sector allocation per se increased by 2.21%, as compared to November.

With all these changes, Insurance and Construction while remaining static, now find themselves pushed into the limelight of the top 5 sectors for Franklin India Bluechip Fund.

Top 10 stocks

While ICICI Bank continues to remain the crowd favourite, it gets a haircut to go down from 10.25% to 8.68% in Franklin. Reliance Industries and HDFC continue to be absent from the fund.

While L&T finds it’s way in all the funds, Axis is not getting very good vibes from it. So, the stock sees itself slashed down from 1.10% to 0.11%!

Bharti Airtel, as mentioned above has seen a reduction in allocation across the board which shows in it’s slipping of ranks in some funds.

TCS continues to remain absent only from the ICICI fund.

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