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Aditya Birla Sun Life AMC Limited

Aditya Birla Sun Life AMC Limited

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    Aditya Birla Sun Life AMC Limited

    How large cap funds can help achieve bigger goals?

    May 17, 2024
    3 mins | Views 9053

    Say you are out in the market looking for a brand-new television, what do you look for first? Products that are sold by established companies and preferably branded. Why? Probably because these can be trusted to be long lasting and not break down in a few years which may happen with inexpensive unbranded products.

    Financial planning, particularly selecting investment instruments for your long-term financial goals work in the same way. Long term financial goals include goals such as saving up for your child’s higher education or marriage, funding your retirement or purchasing your dream home. They generally require accumulation of considerably large amounts and tend to be far more critical than other goals, necessitating a specific investing style. Seeking out investments that have the potential to deliver reasonable returns over a long term yet carrying relatively lower risk is key here.

    Just as we seek out branded consumer goods, it is the large cap, established listed companies that can be looked upon for funding long term goals. While picking the correct branded appliance to buy can be done with a simple research, the picking of the right stocks to invest in out of the 100 large cap companies listed on the stock market is a far more technical task.

    An equity oriented mutual fund scheme, like Aditya Birla Sun Life Frontline Equity Fund, whose asset allocation is primarily focused on select stocks of large cap companies can be solution here.

    The fund in a nutshell

    Aditya Birla Sun Life Frontline Equity Fund is an open ended equity scheme predominantly investing in large cap stocks. It invests at least 80% of its corpus in stocks of large cap companies. The top 100 companies in terms of full market capitalization comprises the investment universe for this scheme. The scheme seeks to identify companies with financial stability, corporate governance, and potential for future growth. However, the scheme shall have the flexibility of selecting stocks within a particular sector from a wider investment universe.

    Potential benefits

    • Track record of large cap companies

      The stocks in which this fund seeks to invest are not only large in size but are also the companies that have been established since years and have made a trusted name for themselves based on a track record of operational and financial efficiency. The operational stability of these companies can make them financially stable – giving them the ability to sail smoothly through different market cycles. They thus may have a relatively lower propensity to risk as compared to mid & small size companies.

    • Growth potential

      At the same time, these companies may also enjoy growth potential. Established companies tend to have well planned growth plans which though may take years to turn profitable but may have a higher probability of success over the long term. This could give your money potential for capital growth.

    • Growth is time tested

      The stability of large cap stocks is known to have the potential of reasonable returns that can continue through different market cycles.

    • Diversification

      While the fund invests within the large cap space, it selects stocks from varying sectors with an aim to provide sectoral diversification in your investment.

    When we spend lots of time and effort in internet research and reading reviews before buying the latest gadget, our long-term critical goals definitely deserve prudent planning. Aditya Birla Sun Life Frontline Equity Fund is one of the schemes which can help you in achieving some of the key financial goals of your life.

    Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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