A Large-Cap Fund For Turbulent Markets

In an environment characterised by high volatility in the backdrop of continuous geopolitical and macroeconomic developments, Indian equity markets have been underwhelming over the past 16 months, figuring among the worst performers globally.

Despite relatively healthy domestic macro on GDP growth, inflation and fast-moving indicators such as IIP, and reasonable corporate earnings, FPI outflows have continued unabated.

As broader markets face a steady decline with mid/small caps facing greater heat, investors having been taking shelter in large-caps amongst which there are some pockets of valuation comfort.

In general, large-cap funds must figure among the key investments in any retail portfolio.

Mahindra Manulife Large Cap fund is a scheme with a track record of a little less than seven years and has delivered healthy and consistent returns over this time period.

Investors with a reasonable risk appetite and a horizon of five-plus years can consider the fund via the SIP (systematic investment plan) route as part of their satellite portfolio for diversification.

Sturdy performance

In a category where outperforming the bluechip index, Nifty 100 TRI, has been quite challenging, Mahindra Manulife Large Cap (direct plan) has regularly beaten the benchmark.

When point-to-point returns are considered over the past one-, three- and five-year timeframes, the fund has outperformed the Nifty 100 TRI by 1.4-1.7 percentage points over medium to long term.

On rolling returns, the scheme’s performance is equally robust.

When 3-year rolling returns are considered over the period of March 2019 to January 2026, Mahindra Manulife Large Cap has outperformed the Nifty 100 TRI almost 95 per cent of the time. The fund has delivered more than 12 per cent returns 99 per cent of the time and in excess of 15 per cent for almost 82 per cent of the time.

On a 3-year rolling basis over the aforementioned timeframe, the fund has given a mean return of 17.7 per cent, while the Nifty 100 TRI returned 16.5 per cent.

When monthly SIP performance is considered from March 2019 to January 2026, Mahindra Manulife Large Cap has delivered 15.3 per cent returns (XIRR). The Nifty 100 TRI managed to deliver 13.9 per cent over the same period.

The fund has an upside capture ratio of 101.85, indicating that its NAV rises a bit more than the benchmark during rallies. It has a downside capture ratio of 91.62, suggesting that the scheme’s NAV falls fairly less than the benchmark during corrections. A score of 100 indicates that a fund performs in line with its benchmark. This inference is based on returns from January 2020 to January 2025. Other key risk measures such as Jensen’s alpha, Sortino ratio and Sharpe ratio are all healthy.

All the aforementioned data pertain to the direct plan of Mahindra Manulife Large Cap fund.

Limited churn

The fund sticks to its mandate and invests in large-cap stocks for most parts. In general, large-cap stocks have accounted for 87-89 per cent of the portfolio over the past few years. Exposure to mid/small-cap stocks is generally kept to around 10 per cent or less.

Cash positions are restricted to less than 4 per cent and is usually less than 2 per cent during most times.

In terms of sectors chosen for the portfolio, Mahindra Manulife Large Cap maintains a fair degree of stability in its top holdings.

Financial services firms have been top holdings for the fund over the years and it has generally stuck to leaders in the segment such as HDFC Bank, ICICI Bank, Bajaj Finserv, SBI and Axis Bank. These exposures have especially helped the fund in the last 18 months when the markets have been turbulent and financial services firms have been healthy outperformers.

Information technology also has been consistently the second-largest holding. Large-cap stocks have faced business challenges in the last couple of years; stocks faced sell offs, but have recovered 12-30 per cent from their lows registered in 2025.

Oil, Gas & Consumable fuels has been another key holding across markets. The BSE Oil & Gas index is still below its August 2024 highs, but has recovered 25 per cent from the February 2025 lows.

Beyond these segments, the fund has been a bit more active in shuffling holdings. It has trimmed exposure to the underperforming FMCG (fast moving consumer goods) sector that faces structural challenges from new-age/alternative sales channels and niche ecommerce companies.

The scheme has upped stakes in the growing telecommunications segment.

Mahindra Manulife Large Cap maintains a compact portfolio of around 50-odd stocks.

Published on January 31, 2026