Nippon India Multi Cap Fund is outshining peers and benchmarks by a margin

Nippon India Multi Cap Fund, launched in March 2005, has consistently featured in the top 30 percentile of the value/contra funds category of the CRISIL Mutual Fund Ranking (CMFR) for three consecutive quarters through April–June 2023.

The fund’s month-end assets under management increased to Rs 18,974 crore in July 2023 from Rs 7,501 crore in July 2020.

Sailesh Raj Bhan and Ashutosh Bhargava have been managing this fund since March 2005 and September 2021, respectively.

The investment objective of the scheme is to generate capital appreciation from a portfolio predominantly invested in equity and equity-related instruments.

Trailing returns

The fund has outperformed the benchmark (NIFTY500 Multicap 50:25:25 TRI) and its peers (funds ranked under the multi-cap category in June 2023 CMFR) in the past one-, two-, three-, five-, and seven-year trailing periods.

To put this in perspective, Rs 10,000 invested in the fund on March 28, 2005, i.e., its inception, would have increased to Rs 2.07 lakh on August 31, 2023, at an annualised rate of 17.88 per cent.

Whereas, over this period, the same investment in the category and benchmark would have grown to Rs 1.6 lakh (16.26 per cent) and Rs 1.47 lakh (15.75 per cent), respectively.

A systematic investment plan is a disciplined mode of investing offered by mutual funds through which one can invest a certain amount at regular intervals. A monthly investment of Rs 10,000 for 10 years in the fund, totalling Rs 12 lakh, would have grown to Rs 29.62 lakh (or 17.21 per cent annualised return), compared with Rs 27.87 lakh (16.08 per cent) in the benchmark as of August 31, 2023.

Portfolio analysis

In the past three years, the fund has taken on higher exposure to large-cap stocks and maintained on-par exposure to mid- and small-cap stocks. Allocations to mid-cap and small-cap stocks averaged 26.06 per cent and 26.86 per cent, respectively, while allocations to large-cap stocks averaged 45.76 per cent.

The portfolio was diversified across 34 industries. Banks dominated, with an average allocation of 15.95 per cent, followed by finance (9.21 per cent), industrial capital goods (9.19 per cent), and information technology (7.8 per cent).

In the period under analysis, the fund took exposure to 202 stocks and held 31 consistently.

Key contributing stocks to the portfolio were Linde India, State Bank of India, Indian Hotels Company, ICICI Bank, and Kennametal India.

(CRISIL Research)