principal largecap fund review


Principal Largecap fund, a newly launching equity mutual fund by NFO (New Fund Offering) between 28th September 2020 to 12th October 2020. During this NFO period, you can get 1 unit for Rs. 10 as NAV (Net Value Asset).

The fund will impress the investor, as it has two facilities


The tagline of the fund is “Get Bigger Together”. As it mentions together, the fund is going to invest in both India and American large cap funds.

Let have a deep dive into the fund overview and other aspects.




  • This is the first-ever Largecap fund which is investing in top companies of India and America.
  • An open-ended equity fund which invests predominately in Largecap stocks.
  • The fund will be allocated by 80-85% of Largecap stocks from Indian companies and 15% in the US companies.
  • It is compared with NIFTY 100 TRI as a benchmark


What are Largecap Stocks?


India – Top 100 companies of Indian stock market decided by the market capitalization are termed to be Largecap stocks

America – The companies with a market capitalization of more than $50 Billion are the Largecap stocks.


  • The fund is completely diversified with 45 – 50 Largecap stocks across 4-5 sectors.
  • The fund has categorized under a moderately high-risk profile.
  • This fund will benefit them long term investors to hold their investments for another 20 years.
  • Also, those who have an interest in US stocks can opt for this fund.




As we informed earlier of this article. The fund comes with two facilities to benefit the investors too,

  • Protect their capital from the market crash or fall.
  • To leverage the return as set by investors as the target rate.

The facilities are,

  1. SMART:

  • The facilities are used whenever the market falls sharply to less than 3%.
  • 25% of the fund will be allocated to the Principal Large-cap fund and 75% of the fund will be parked in the Principal Cash Management Fund.
  • In case the market doesn’t fall, the fund from the Principal Cash management fund will automatically transfer to the Principal Large-cap fund.
  1. MY GAIN:

  • This facility is used for triggering the targeted returns as per the investor’s appetite.
  • As per this facility, when the investment amount in the Principal Large-cap fund reaches the target rate of return.
  • The fund amount or Units from principal large cap funds can be shifted to any principal funds as per the investor’s choice.




  • Large cap stock investments will always have low risk compared to other companies.
  • Investing in US stocks will have extra Dollar appreciation in value. The dollar cost in 2010 was Rs. 60 and currently, it is around Rs. 74.
  • The option is SMART is really awesome. An investor should be more vigilant on protecting the cash.
  • The large cap companies have steady revenue and will have sustained growth in the future.
  • Principal mutual funds AMC has over 141 year’s experience in handling US stocks.
  • Investing in fundamentally strong companies.
  • Principal manages asset values of twice of total Indian mutual fund industry in the US.
  • Will get a chance of investing in World-leading companies like Amazon, Apple, Alphabet, Google, Netflix, JP Morgan, etc.




  • Expense Ratio for Direct plan – 1.22%
  • Expense Ratio for Regular plan – 2.24%
  • The Category average of large cap funds returns are
    • 1 year – 0.75%
    • 2 years – 3.61%
    • 3 Years – 4.51%
    • 5 Years – 7.97%
    • 7 years – 11.23%.
  • Category average Risk Management
    • Standard Deviation – 17.22
    • Beta – 0.81
    • Sharp Ratio – 0.05
    • Treynor’s Ratio – 0.01
    • Jension’s Alpha – (1.51)
  • The number of holding (category average) – 43.53 stocks.




  • The scheme comes with both Direct and regular plans. Also has both dividend and Growth options
  • The minimum one-time investment starts with Rs. 5000 to open the fund.
  • A systematic Investment plan can be chosen by investing a minimum of Rs. 500 per month.
  • To start the SMART facility, the minimum investment will be Rs. 25000.
  • Systematic Transfer Plan can opt from Rs. 1000 per month in a minimum of 6 installments.
  • No entry load. Exit load of 1% if redeemed within 365 days.




  1. Mr. Sudhir Kedia:

  • He has an experience of 13 years in equity research in AMC’s.
  • Prior to Principal Asset management company, he has worked with Mirae AMC, and ASK investment.
  • In principal AMC, he looks after 3 funds
    • Principal Tax Savings Fund
    • Principal Equity Savings Fund
    • Principal Midcap Fund
  • The average 5 years returns of these 3 funds are around 8%.
  • The return of these funds is not impressive. The category average is at 10.5% per annum


  1. Mr. Anirvan Sarkar:

  • He has an overall 9 year’s experience in sell-side and buy-side research.
  • Prior to Principal AMC, he was associated with Motilal Oswal securities, Equirus Securities, CRISIL Global research, and candlestick advisor.
  • In principal AMC, he manages the Principal Global Equity fund.
  • The 5 years return of the fund is 7.24% per annum




  • Investors who look for a long term investing with consistent performance can choose the fund.
  • Currently, please stand away from investing in the Equity market. As the market may correct or crash at any point.
  • Once, the market corrects. You can start investing in these types of funds.
  • Most funds of Principal AMC are more volatile than the category average and NIFTY 100 TRI index.
  • SMART facility and US stocks are seeming to be positive take points.
  • The fund manager’s history is very pathetic.

Also, have a look at the basics of Equity Mutual funds