UTI Large cap Fund Regular Plan Growth INF789F01976

Karthikraj Lakshmanan follows a growth-at-a-reasonable-price, or GARP, approach, predominantly investing in reasonably priced large-cap businesses within the BSE 100 index.

The investment process is structured, research-intensive, and disciplined. The fund employs a top-down approach for sector allocations and a bottom-up approach for stock selection. The process begins with identifying companies with strong operating profits and a consistent long-term return on equity. Instead of relying on forecasts, the team emphasizes historical trends and patterns discerned from business performance. Qualitative factors such as management strength, business model, and competitive advantages are also key considerations.

The team actively tracks around 375 stocks, refining the investable universe through regular reviews. While the portfolio remains closely aligned with the benchmark, the managers take selective active calls based on relative valuation metrics like price/earnings, price/book, and EV/EBITDA.

Since taking over, Lakshmanan has faced short-term execution challenges as markets favored value-oriented strategies over the fund's growth and quality focus. However, he has stayed disciplined, prioritizing long-term fundamentals and valuation integrity despite near-term underperformance, reinforcing our conviction in the Process Pillar.

With 75% to 85% of holdings sourced from the BSE 100 Index, the fund's large-cap bias is evident, favoring established businesses with strong fundamentals. The portfolio typically includes well-known companies with established business models. Investment in benchmark heavyweights such as HDFC, ICICI Bank, Reliance, TCS, Infosys, and L&T typify the investment style of the portfolio manager. A degree of benchmark-consciousness is apparent in the portfolio’s sector weightings, too.

The fund maintains a diversified portfolio, and with its buy-and-hold strategy, the portfolio's turnover ratio is lower than peers'. The manager avoids taking tactical calls but does not shy away from exiting a stock as a corrective measure if it does not pan out as expected.

The fund remains overweight in financials, particularly banks with strong liability franchises and capital adequacy. It also sees long-term growth potential in the IT sector from a strategic and structural perspective. Additionally, the fund maintains an overweight stance on consumer durables, driven by long-term growth potential from low penetration, evolving lifestyles, and a growing working-age population.