If you are looking for a fund category to invest for at least 3 years, large & mid-cap fund category can be a good choice in the current market scenario.
A research report by Union MF shows that valuations of large cap and mid cap stocks are reasonable at this point with many stocks available at a discount. The price/fair value ratio is at 0.95 for large cap stocks and 1.02 for mid-cap stocks, a trend that was last seen 4 years ago.
A price/fair value ratio below 1 suggests the stock is trading at a discount to its fair value, while a ratio above 1 suggests it is trading at a premium to its fair value.
Further, data available on Value Research shows that the large & mid-cap fund category has delivered CAGR of 9.44% in the past 3 years and is among the top categories in the equity fund space.
Hence, Union Mutual Fund has launched Union Large & Midcap Fund. The NFO of this scheme opens on November 15 and closes on November 29.
G. Pradeepkumar, CEO, Union AMC said, “This product offering is in line with our long term plan of making Union AMC a one stop shop for investors with varied investment requirements. Our research says that one of the biggest beneficiaries of this GDP growth could be blue chip and emerging blue chip companies. Hence, it makes sense for investors to be part of such an investment strategy.”
The ‘Union Large & Midcap Fund’ will invest at least 35% of its total fund in large cap stocks and 35% in mid cap stocks. The rest 30% will be allocated tactically based on the evolving scenario in the market.
This fund will be managed by Vinay Paharia, CIO, Union AMC. This scheme is benchmarked against S&P BSE 250 Large MidCap Index (TRI). The minimum investment required is Rs 5,000.
