Investors looking for a stable and quality large-cap performer in these volatile markets can buy units of JP Morgan India Equity (JPM Equity). The scheme, though not as keenly followed as some of the familiar names, has, nonetheless, been able to deliver returns that place it in the top quartile of funds in its category, across time frames.

JPM Equity has especially improved on its performance over the past three years. In this period, it has delivered annual returns of nearly 22 per cent, ahead of peers such as L&T India Large Cap and ICICI Pru Top 100. It has also been marginally ahead of top-notch names such as ICICI Pru Focused Bluechip over one and three-year time frames.

The scheme has outperformed its BSE 200 benchmark over one, three and five-year periods by a margin of 4-10 percentage points. But though benchmarked to the BSE 200, almost its entire portfolio comprises only quality large-cap names, which makes it a relatively low-risk bet. Investors with a five-year time horizon can buy units in the fund through the SIP (systematic investment plan) route as the scheme can be a quality addition to their portfolio.

Portfolio and strategy

JPM Equity invests mostly in stocks from the Sensex and Nifty indices and goes only mildly down the market-cap curve. Nearly 90 per cent of its portfolio is made up of stocks with a market capitalisation of more than ₹10,000 crore. The scheme also remains almost fully invested in equities, taking cash or debt calls rarely to 3-4 per cent levels.

It did have a defensive tilt three years ago, with software, pharma and consumer non-durables its top holdings. This helped in the falling and volatile markets of 2013. But JPM Equity changed course from early 2014, reducing stakes in software and consumer non-durables while raising stakes in automobiles, construction projects and banks. This helped it outperform as these segments had a fantastic rally over the past one year.

What makes the fund’s performance special is the low level of risk in the portfolio for higher returns. The fund has managed robust performance despite sticking to safe large-cap names and not getting tempted to get into volatile mid-caps even as such stocks rallied.

The scheme generally holds 40-45 stocks in its portfolio and rarely takes concentrated exposure to individual names, barring top three or four holdings.

ITC, SBI, Shriram Transport Finance, Lupin, TCS and HDFC are some of the key stocks in its portfolio. Over the last one year, the fund exited underperforming stocks such as Bata India, Cairn India, Just Dial and Sesa Sterlite.

Stability and above-average returns over longer time make the fund an attractive option.

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