These Stocks Led Large-Cap Funds' Outperformance Last Year
NTPC Ltd. was among the most popular holdings for top performing large-cap funds last year.
HDFC Bank Ltd., ICICI Bank Ltd., Axis Bank Ltd., and Infosys Ltd. also made it to the top five, but at best only matched market returns over a one-year period.
As many as 21 actively managed equity funds in the large-cap category managed to beat market returns, despite a record rally in Indian markets. The benchmark NSE Nifty 50 has grown over 27% during this period.
Market experts attributed this outperformance to three key reasons: reduced holdings in lagging heavyweights in the benchmark, capitalising on the surge in public sector enterprises, and allocating a portion in broader markets which outperformed the large caps.
The most commonly held stocks by the top five highest performing large-cap funds included the likes of NTPC, which gave a return of over 95%, State Bank of India which grew 47%, and Larsen & Toubro Ltd., which rose 42%.
JM Large Cap Fund
With a 45.6% return over a one-year period through the regular route, the JM Large Cap Fund was the top performing scheme in its category. A closer look at its holdings through the year reveal that the outperformance was aided by Larsen & Toubro.
The engineering, procurement and construction solutions conglomerate held the highest weightage in this fund's holdings through the year, with the stock growing by over 42%.
It also held Power Finance Corp., Bank of Baroda as well as NTPC, which delivered stellar returns as government-owned stocks were among the leading performers in the markets rally.
Quant Large Cap Fund
With the second greatest outperformance over the benchmark, and a return of 45.4%, the scheme benefitted greatly from active reallocation of its holdings, rebalancing its top 10 holdings across at least 30 different stocks over a one-year period.
Its top holdings included multiple PSEs such as Life Insurance Corp. of India, GAIL Ltd., Coal India Ltd., as well as NTPC.
Bank Of India Bluechip Fund
Over the year, this scheme reduced its holdings in the benchmark heavyweight HDFC Bank Ltd., starting from 9.6% in June last year, to 6.3% in May 2024—nearly half its weight in the Nifty 50.
In return, the fund raised its exposure to State Bank of India steadily from 4.1% a year ago to 5.6% as of last month.
The fund, which delivered the third-highest returns in its category, also held NTPC as well as Havells India Ltd., which has grown 42.2% over the last year.
Nippon India Large Cap Fund
Despite a notable outperformance over the benchmark, this fund churned its holdings the least among the top-five outperforming funds. The top 10 holdings for the scheme featured only 15 stocks, including Tata Power Co., which has nearly doubled in a one-year period, as well as NTPC.
Taurus Large Cap Fund
The smallest fund in its category by total value of assets held managed to beat its peers aided by its holdings in multiple market outperformers such as SBI, Coal India, BEML Ltd., NTPC, and Indian Oil Corp., but also featured Computer Age Management Systems Ltd. This small-cap stock delivered a return of over 66% during a one-year period.
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