Listen to this article
Considering the opportunities generated with the rapid and dynamic growth of the Indian economy, Groww Mutual Fund has launched an open-ended equity scheme ‘Groww Multicap Fund’.
The NFO, which is open between November 26 to December 10, 2024, aims to capture growth across large-cap, mid-cap and small-cap stocks.
Nifty 500 Multicap 50:25:25 Index – TRI is the benchmark index for the fund. The minimum investment amount of the fund is Rs. 100. The fund has an exit load of 1% for redemption within a year, which is NIL after a year.
Anupam Tiwari will be the fund manager for this fund.
The fund will adhere to a disciplined multicap framework by allocating a minimum of 25% each to large, mid, and small-cap stocks while it will invest the remaining 25% of the fund dynamically.
Varun Gupta, CEO of Groww Mutual Fund said, “India’s unparalleled growth in scope and diversity, presents opportunities across sectors and market capitalizations. This fund focuses on diversification and our Quality & Growth at a Reasonable Price (Q-GaRP) philosophy provides investors with a structured way to participate in this transformative journey.”
The fund house in a presentation said that the investment philosophy of the fund focuses on growing companies, quality companies and their valuation discipline. The fund will employ a bottom-up approach for midcap and small caps while using a top-down approach for large caps.
Bottom-up approach to create mid and small cap portfolio
In the bottom-up approach, the fund house will focus on growth above valuation while it will avoid zones of overvaluation to make the small & midcap portfolio. The fund will largely follow the buy & hold strategy.
Apart from this, while selecting the stocks, the fund will also look at the scalability of the businesses, sectoral tailwinds, capable management, strong governance and fundamentals like balance sheet and return on equity (ROE).
Top-down approach to create large cap portfolio
To construct the large cap portfolio, the fund identifies the growth sectors then selects the stocks within sectors based on relative growth and relative valuation.
While making the portfolio, the fund will give more weightage to valuation over growth and manage the portfolio actively according to earning cycles.
Selection of stocks for portfolio
Groww MF said that the large, medium and small cap stocks will be selected from the specific sectors of the economy.
Large caps include the industries that align with macroeconomic trends and represent established market leaders. These industries include financial services, FMCG, pharmaceuticals, and automobiles.
Midcaps include sectors where the growth is driven by domestic demand and technological advancements. This includes sectors like logistics, financial technology, healthcare analytics, and industrial gases.
On the other hand, small caps focus on niche areas such as specialty chemicals, ceramics, and BPO services, benefiting from initiatives like ‘Make in India’ and the PLI scheme.
