Should WhiteOak Capital Large Cap Fund be a Part of Your Equity Allocation?

Historically, Large Caps have fallen less compared to Small and midcaps during a market crisis, and the recovery after the fall has been much faster in the Large Cap Index. Investors may choose the Large Cap segment as a core part of their equity allocation; first-time pure equity investors can also consider this segment as the starting point.

WhiteOak Capital Mutual Fund has launched its blue-chip fund WhiteOak Capital Large Cap Fund, it is an open-ended equity scheme predominantly investing in large-cap stocks. Commenting on the launch of this fund, Mr Aashish Somaiyaa, CEO WhiteOak Capital Mutual Fund, said, "After the successful launch of our previous funds i.e., Flexi Cap, Mid Cap and Tax Saver ELSS, we are launching a Large Cap NFO WhiteOak Capital MF intends to fill a vacuum of actively managed funds in India, and we will leave no stone unturned to provide best-in-class investment products to retail investors."

The investment strategy for WhiteOak Capital Large Cap Fund is as follows:

WhiteOak Capital Large Cap Fund aims to provide long-term capital appreciation by investing predominantly in Large-Cap companies. The scheme will maintain a minimum exposure of 80% to Large Cap stocks and diversify across key sectors.

The investment strategy is to invest in businesses based on stock selection and to avoid focusing on macro events. We believe in investing in good businesses at attractive valuations. These are the two critical pillars of our investment philosophy - business and valuation. A good business is one that is well-managed, scalable, and generates superior returns on incremental capital. Valuation is attractive when the current market price is at a substantial discount to intrinsic value. Key attributes to look for in a Business:

• Superior returns on incremental capital

• Scalable long-term opportunity

• Strong execution and governance

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The scheme will concentrate on creating a well-diversified portfolio that can perform through all market cycles. The fund house uses an internal, proprietary investment framework called 'Opco-Finco', which is based on an analysis of cash flows; it avoids several distortions that can potentially emerge while using accounting multiples. Depending on the suitability, the traditional valuation approaches might be used for valuation.

The Fund managers will consciously seek to maintain a balanced portfolio rather than being driven by non-stock-specific macro factors, such as market timing, sector, currency or other such factor exposures.

Under normal circumstances, the asset allocation will be as under:

Who will manage WhiteOak Capital Large Cap Fund?

Mr Ramesh Mantri, Ms Trupti Agrawal, Mr Piyush Baranwal for debt securities and Mr Shariq Merchant for overseas securities will be the designated fund managers for this scheme.

Mr Ramesh Mantri will be managing the equity portion of the scheme. He is a CFA, CA and MBA with over 18 years of experience in the financial market. Prior to joining WhiteOak Capital AMC, he was associated with Ashoka Capital Advisers, Smith Management - Mumbai office and CRISIL. At WhiteOak Capital Mutual Fund, Mr Mantri currently manages WhiteOak Capital Flexi Cap Fund, WhiteOak Capital Mid Cap Fund, and WhiteOak Capital Tax Saver Fund.

Ms Trupti Agrawal will be managing the overseas investments of the scheme. She is a CA and B.com graduate with collectively around 13 years of experience in the financial services industry. Prior to joining WhiteOak Capital AMC, she was working with Khoob Saree, Marketune, L&T Infrastructure Finance Company Limited and S.R.Batliboi & Associates. At WhiteOak Capital Mutual Fund, Ms Agrawal currently manages WhiteOak Capital Flexi Cap Fund, WhiteOak Capital Mid Cap Fund, and WhiteOak Capital Tax Saver Fund.

Mr Piyush Baranwal will be managing the debt portion of the scheme. He is CFA and holds Bachelor of Engineering and PGDBM degrees. He has an overall experience of 14 years in Portfolio Management and trading in Fixed Income securities. Prior to joining WhiteOak Capital AMC, he was working with BOI AXA Investment Managers, Morgan Stanley Investment Management and Principal PNB Asset Management Company.

At WhiteOak Capital Mutual Fund, Mr Baranwal currently manages WhiteOak Capital Overnight Fund, WhiteOak Capital Liquid Fund, WhiteOak Capital Ultra Short Term Fund, WhiteOak Capital Flexi Cap Fund, WhiteOak Capital Mid Cap Fund, and WhiteOak Capital Tax Saver Fund.

Mr Shariq Merchant will be managing the overseas secuirities in this scheme. He is a CA, Passed all 3 levels of the CFA program and has an overall 11 years of experience in Financial market. Prior to joining WhiteOak AMC, he was working with DC India Advisors LLP, Quest Investment Advisors Pvt Ltd., Ambit Investment Advisors Pvt Ltd., Ambit Holdings Pvt Ltd and Ambit Capital Pvt Ltd. At WhiteOak Capital Mutual Fund, Mr Shariq Merchant currently does not manage any other schemes.

Fund Outlook - WhiteOak Capital Large Cap Fund

WhiteOak Capital Large Cap Fund aims to predominantly invest in Large-Cap companies across key sectors. Many of the Large Cap Companies not only serve the domestic market but the international market as well. Nearly one-fourth of their revenue comes from outside India, making them geographically more diversified.

The scheme invests in blue-chip stocks with more than Rs. 1000 Crore Market Cap and maintains a balanced portfolio of pro-cyclical and counter-cyclical stocks to help reduce macroeconomic shocks. The scheme also provides a tactical allocation to mid-caps to capture compelling opportunities in this segment. There are ample active opportunities for alpha generation in the large-cap space through correct sizing and a rigorous stock selection process. The scheme being actively managed, the fund manager's ability to construct the portfolio remains to be seen.

Although the scheme invests in large-cap stocks, which offer stability to your portfolio and are less volatile as compared to the mid and small-cap counterparts, they are still prone to equity market risks. In addition, the persistent repercussions of the geopolitical tension, spiralling inflation and the fears of a possible recession in the US in 2023 may cause a significant risk to economic growth and continue the prevailing high market volatility. The margin of safety appears to be narrow, and the clear direction for the equity market from the current elevated levels is uncertain. These factors, among many others, may affect the scheme's performance.

Thus, WhiteOak Capital Large Cap Fund is suitable for investors seeking some stability in their equity mix. You should ensure you have a high-risk appetite and a long investment horizon to sustain market volatility and that your investment objectives align with the fund.

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Warm Regards,
Mitali Dhoke
Research Analyst