{"id":1280,"date":"2019-11-19T11:37:51","date_gmt":"2019-11-19T11:37:51","guid":{"rendered":"https:\/\/blog.certifiedfinancialguardian.com\/?p=1280"},"modified":"2019-11-29T12:42:59","modified_gmt":"2019-11-29T12:42:59","slug":"union-large-midcap-fund-good-catch-to-add-into-the-portfolio","status":"publish","type":"post","link":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/2019\/11\/19\/union-large-midcap-fund-good-catch-to-add-into-the-portfolio\/","title":{"rendered":"Union Large & Midcap Fund: Good Catch To Add Into The Portfolio?"},"content":{"rendered":"\n

Equity markets have been volatile lately due to a host of domestic and international macro and micro economic factors. But if you notice the graph given below, smallcap index has had a drastic fall but Largecap index and midcap index have managed to sustain the headwinds.<\/p>\n\n\n\n

Besides, the recent corporate tax rate cut did\nboost the earnings of certain index heavyweights which improved the market\nsentiment leading to revival of indices.<\/p>\n\n\n\n

Graph 1: Large caps hold strength while mid and small caps are down<\/em><\/strong><\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

Data as of November 19, 2019
(Source: ACE, MF) <\/p>\n\n\n\n

Looking at the current market sentiment,\nseveral fund houses are of the view that when large-cap space and midcap space\nare combined, one gets an opportunity to invest in stability of large-caps and\nhigh growth potential of midcaps. Hence even Union Mutual Fund launched Union\nLarge & Midcap Fund. <\/p>\n\n\n\n

When combining the stocks of a large-cap\nand mid-cap segment, it covers 87% of the market capitalisation to a universe\nof 250 companies ranging from Rs 8,858 crore to Rs 8,12,262 crore. <\/p>\n\n\n\n

The fund house is of the view Large caps consists of blue-chip companies, usually, market leaders that have established track record and they keep getting get better and bigger with less volatility involved. Whereas midcap companies appreciate into large-cap stocks over long term and that both of them are at reasonable valuations. The current price to value trade-off last seen was 4 years ago, based on the research done<\/a> by the Union Mutual Fund.  <\/p>\n\n\n\n

The stock prices track fair value, that tracks GDP and India\u2019s GDP is poised to grow at a faster rate as the Government has introduced a slew of measures<\/a> to increase the growth potential of markets.  Hence a large and midcap fund can provide better risk-adjusted returns was launched.<\/p>\n\n\n\n

So, ULMF will follow the asset allocation\nlimits to allocate its assets between 35% to 65% investment in equity &\nequity related instruments of large-cap and mid-cap companies each. The fund\nmay also allocate utmost 30% of its assets to equities and equity-related\nsecurities of other than large-cap and mid-cap companies with the remaining\nallocation to debt instruments and money market instruments.<\/p>\n\n\n\n

Thus, when you plan for long-term goals,\nwant the stability of large-caps along with the agility of mid-caps in the\njourney of wealth creation and accomplishing financial goals and if you have\nthe stomach for moderately high risk, you may skew your equity portfolio to\na Large & Mid-cap fund<\/a>.<\/p>\n\n\n\n

[Read<\/strong>: Why Comparing Returns to Risk Is More Meaningful!<\/a>]<\/p>\n\n\n\n

Image\n1: Risk-return trade-off of large-cap & midcap fund<\/em><\/strong><\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

(Source: Union Large & Midcap Fund Product Brochure-Presentation<\/a>) <\/p>\n\n\n\n

Table\n1:  Details of Union Large & Midcap Fund<\/em><\/strong><\/p>\n\n\n\n

\n Type<\/strong>\n <\/td>An open-ended equity scheme investing in both large-cap and mid-cap stocks<\/td>\n Category<\/strong>\n <\/td>Large and Midcap Fund<\/td><\/tr>
\n Investment Objective<\/strong>\n <\/td>\nTo seek to generate capital appreciation by investing predominantly in a portfolio of equity and equity-linked securities of large-cap and mid-cap companies.

\nHowever, there can be no assurance that the investment objective of the scheme will be achieved.\n\n <\/td><\/tr>
\n Min. Investment<\/strong>\n <\/td>\n Rs 5,000 and in multiples of Re 1 thereafter\n <\/td>\n Face Value<\/strong>\n <\/td>Rs 10 per unit<\/td><\/tr>\n\t
\n Plans <\/strong>\n <\/td>\n \u2022 Regular
\n\t\u2022 Direct<\/td>		\n Options<\/strong>\n <\/td>\n
    \n\t\t
  • Growth*<\/li>\n\t
  • \tDividend<\/li>\n\t
      \n\t
    • Pay-out facility<\/li>\n\t\t
    • Reinvestment facility*<\/li>\n\t\t
    • Sweep facility <\/li>\n\t <\/ul>\n\t<\/ul>\n\t*Default option\n <\/td><\/tr>\n\t
\n Entry Load<\/strong>\n <\/td>Nil<\/td>\n Exit Load<\/strong>\n <\/td>1% if units are redeemed or switched out on or before completion of 1 year from the date of allotment. Nil thereafter\n <\/td><\/tr>
\n Fund Manager<\/strong>\n <\/td>Mr Vinay Paharia<\/td>\n Benchmark Index<\/strong>\n <\/td>S&P BSE 250 LargeMidCap Index$ (TRI)<\/td><\/tr>
\n Issue Opens<\/strong>\n <\/td>November 15, 2019<\/td>\n Issue Closes:<\/strong>\n <\/td>November 29, 2019\n<\/td><\/tr><\/tbody><\/table><\/div><\/center>\n\n\n\n

$Disclaimer: The “Index”\nviz. \u201cS&P BSE 250 LargeMidCap Index\u201d, is a product of Asia Index Private\nLimited (AIPL), which is a joint venture of S&P Dow Jones Indices LLC or\nits affiliates (\u201cSPDJI\u201d) and BSE, and has been licensed for use by Union Asset\nManagement Company Private Limited. Standard & Poor\u2019s\u00ae and S&P\u00ae are\nregistered trademarks of Standard & Poor\u2019s Financial Services LLC\n(\u201cS&P\u201d); BSE\u00ae is a registered trademark of BSE Limited (\u201cBSE\u201d); and Dow\nJones\u00ae is a registered trademark of Dow Jones Trademark Holdings LLC (\u201cDow\nJones\u201d). \u00a9 Asia Index Private Limited 2014. All rights reserved.\nRedistribution, reproduction and\/or photocopying in whole or in part are\nprohibited without written permission of AIPL. For more information on any of\nAIPL\u2019s indices please visit http:\/\/www.asiaindex.com\/. None of AIPL, BSE, Dow\nJones Trademark Holdings LLC, their affiliates nor their third party licensors\nmake any representation or warranty, express or implied, as to the ability of\nany index to accurately represent the asset class or market sector that it\npurports to represent and none of AIPL, BSE, S&P Dow Jones Indices LLC, Dow\nJones Trademark Holdings LLC or their affiliates nor their third party\nlicensors shall have any liability for any errors, omissions, or interruptions\nof any index or the data included therein.<\/p>\n\n\n\n

(Source: Scheme\nInformation Document<\/a>)<\/p>\n\n\n\n

How will the scheme allocate its assets?<\/strong><\/p>\n\n\n\n

Under normal circumstances, it is\nanticipated that the asset allocation of ULMF will be as follows:<\/p>\n\n\n\n

Table\n2:  ULMF ‘s Asset Allocation<\/em><\/strong><\/p>\n\n\n\n

\n Instruments<\/strong>\n <\/td>\n Indicative\n Allocation (% of Total Assets)<\/strong>\n <\/td>\n Risk Profile<\/strong>\n <\/td><\/tr>
\n Minimum<\/strong>\n <\/td>\n Maximum<\/strong>\n <\/td><\/tr>
\n Equity & Equity related instruments of Large Cap companies#\n <\/td>\n 35\n <\/td>\n 65\n <\/td>\n High\n <\/td><\/tr>
\n Equity & Equity related instruments of Mid Cap companies#\n <\/td>\n 35\n <\/td>\n 65\n <\/td>\n High\n <\/td><\/tr>
\n Equity & Equity related instruments of other than Large &\n Mid Cap companies#\n <\/td>\n 0\n <\/td>\n 30\n <\/td>\n High\n <\/td><\/tr>
\n Debt and Money Market Instruments\n <\/td>\n 0\n <\/td>\n 30\n <\/td>\n Low to Medium\n <\/td><\/tr>
\n Units issued by REITs and InvITs\n <\/td>\n 0\n <\/td>\n 10\n <\/td>\n Medium to High\n <\/td><\/tr><\/tbody><\/table><\/div><\/center>\n\n\n\n

# In accordance with SEBI Circular No.\nSEBI\/HO\/IMD\/DF3\/CIR\/P\/2017\/114 dated October 6, 2017, as amended from time to\ntime, Large Cap, Mid Cap and Small Cap are defined as follows: <\/p>\n\n\n\n