LIC MF Large Cap Fund’s net asset value (NAV) as of 12th April 2022 is ₹ 40.8239 (monthly). The trailing returns over different periods are 20.07% (1 year), 16.15% (3 year), 13.06% (5 year) and 5.25% (since launch).
The fund house is LIC Mutual Fund. It was launched on 1st September 1994 and follows the NIFTY 100 Total Return Index. LIC MF Large Cap Fund is a type of open-ended fund. Moreover, the risk is very high.
LIC MF Large Cap Fund holds AUM (Asset under Management) worth ₹637.58 crores as of Feb 28, 2022. The expenses ratio is 2.69% for regular plans. Additionally, the fund attracts an exit load of 1% if one redeems units more than 12% of investment within a year.
The minimum initial investment is ₹5000 and the additional investment is ₹500. Further, the minimum SIP investment is ₹1000.
Things to consider before investing in LIC MF Large Cap Fund
- Firstly, investors should know that the investment in LIC MF Large Cap Fund is at a very high risk.
- Secondly, the 3-year annualized returns are 15.95%.
- Thirdly, the recommended minimum investment horizon is 3 years to make investments profitable and reduce risks.
- Lastly, the fund house takes 5 years and 2 months to double investors’ money.
Asset Allocation by LIC MF Large Cap Fund
LIC MF Large Cap Fund invests in equity and equity-related instruments of large-cap companies including derivatives to achieve long term capital appreciation. The fund manager invests in growth stocks. 96% of portfolio allocation is towards equity and the remaining 4% towards others like derivatives.
Top 10 Equity Holdings
| COMPANY | %ASSETS | P/E | 1 YR RETURN (%) |
| Infosys | 8.89 | 34.2 | 24.71 |
| ICICI Bank | 7.4 | 22.79 | 36.26 |
| HDFC Bank | 6.6 | 22.54 | 6.65 |
| Reliance Industries | 6.2 | 29.91 | 32.57 |
| TCS | 4.83 | 35.34 | 18.91 |
| Avenue Supermarts | 4.14 | 179.1 | 44.34 |
| Bajaj Finance | 3.82 | 74.28 | 53.84 |
| Bajaj Finserv | 3.27 | 61.11 | 66.4 |
| Axis Bank | 3.19 | 19.26 | 20.79 |
| Housing Development Finance Corp | 2.78 | 20.07 | -3.47 |
Top 5 sectors
| SECTORS | % ASSETS |
| Financial | 32.18 |
| Technology | 15.97 |
| Energy | 7.3 |
| Healthcare | 6.63 |
| Consumer Staples | 6.2 |
Quarterly Returns
| YEAR | Q1 | Q2 | Q3 | Q4 |
| 2021 | 1.57 | 8.42 | 12.58 | – |
| 2020 | -22.96 | 11.52 | 5.7 | 25.33 |
| 2019 | 2.78 | 4.52 | 1.4 | 5.56 |
| 2018 | -5.17 | 5.2 | -2.7 | 3.76 |
| 2017 | 11.17 | 4.69 | 3.65 | 5.09 |
Peer to Peer Comparison
| FUND NAME | NAV | AUM (in crores) | 1 YEAR RETURNS (%) | 3 YEAR RETURNS (%) | 5 YEAR RETURNS (%) | RISK (%) |
| LIC MF Large Cap Fund | 40.49 | 674.32 | 20.95 | 15.43 | 12.78 | 18.9 |
| UTI Mastershare | 194.34 | 9848.89 | 21.36 | 16.34 | 13.86 | 20.08 |
| Invesco India Large Cap Fund | 43.74 | 601.85 | 25.2 | 14.91 | 13.25 | 20.73 |
| Axis Bluechip Fund | 44.66 | 35702.2 | 16.48 | 16.24 | 15.94 | 17.52 |
| Baroda BNP Paribas Large Cap Fund | 139.48 | 1305.83 | 19.65 | 16.78 | 13.06 | 18.01 |
Tax implications
- If LIC MF Large Cap Fund units are redeemed within a year, then the short-term capital gains are taxable at 15%.
- If the redemption of the units is after one year period, then one lakh rupees from those capital gains in the financial year is given as tax exemption.
- Moreover, long-term capital gains of more than one lakh rupees are taxable at 10%.
- Additionally, the dividend distribution income, the dividend earned from the fund gets added to the investor’s income and is taxable as per the respective tax slabs.
- Moreover, a dividend income of more than ₹5,000 in a financial year attracts 10% TDS, deducted by the fund house.
Valuation Metrics of LIC MF Large Cap Fund
Firstly, the P/E ratio of LIC MF Large Cap Fund is 30.21 versus the P/E ratio of Equity Large Cap is 30.57. P/E ratio is the price to earnings ratio. It is a valuation metric that divides the market price of the share with earnings per share. But in the case of mutual funds, it is the weighted average of P/E of the stocks in a portfolio. It indicates the investment approach of the fund manager. But it is not the sole investment decision-maker as it just conveys the kind of stocks in a portfolio.
Secondly, the P/B ratio of LIC MF Large Cap Fund is 4.21 versus the P/E ratio of Equity Large Cap is 4.68. P/B is the price to book value. The ratio divides the current closing price of the company’s stock by the latest quarter’s book value.
IT stocks are inflation-proof
Yogesh Patil manages the equity investments of LIC MF. He believes that the rise in short-term interest rates to curb inflation will hit consumption in the country. India is one of the fastest-growing economies. It has the highest number of millennials. Urbanization, digitization, Make in India, etc. will support India’s long-term growth.
The Indian economy is at an inflexion point. It will start a new virtuous growth cycle. Urban consumption is pacing up and rural consumption is resilient. Productivity, the divergence of demographics, and globalization will lead to a higher growth rate in the medium to long term. Hence, the MF remains bullish on domestic consumption and export-driven businesses.
Currently, the two major risks are geopolitical tensions and high inflation. Moreover, the key drivers are the improvements in the macroeconomic environment post-pandemic disruption and capital expenditure.
The CPI in February 2022 was at 6.01, and the WPI remained in double digits in the last financial year. It was just above the RBI’s target of 4-6%. The rise in prices of crude oil, minerals, metals, and food articles led to high inflation. Moreover, US Fed increased the rates by 0.25% in March 2022. The rates will increase gradually in the future. This will again impact inflation and currency.
Historically, high inflation leads to lower consumption. It affects the revenues and margins of various sectors. Metals and energy stocks will perform better in the short run. Whereas, the IT, logistics, and consumer sectors will remain less affected. Moreover, the inflationary pressure will have less impact on industry leaders with high brand values and customer loyalty. This is because they will be able to pass the input costs on to customers.
Conclusion
To conclude, the fund house bets on large-cap stocks where the risk-reward is favorable. Mid-cap and small-cap stocks have been underperforming in the last few months. They remain positive on IT, domestic consumption, private banks, chemicals and export-oriented companies.
