Shriram Launches Large & Mid Cap Fund: Target Long-Term Capital Appreciation with Proprietary Quantamental Strategy

Shriram Launches Large & Mid Cap Fund: Target Long-Term Capital Appreciation with Proprietary Quantamental Strategy​

Shriram Asset Management Company Limited has introduced the Shriram Large & Mid Cap Fund, an open-ended equity scheme designed for investors seeking long-term capital appreciation. The fund focuses on investing in a diversified portfolio of large and mid-cap stocks. This launch positions the product within the competitive realm of dual-market cap investment funds under the purview of SEBI (MF) Regulations 2026.

The newly launched fund is structured to provide exposure across both established large companies and high-growth potential mid-cap entities. The management team for the scheme includes Mr. Hitesh Savanth, a CFA charter holder with over 14 years in financial services, and Mr. Prateek Nigudkar, who brings over 13 years of experience managing equity funds.

Defining the Investment Objective and Strategy​

The primary investment objective of the Shriram Large & Mid Cap Fund is to generate sustained long-term capital appreciation. The fund managers employ a proprietary Quantamental approach for stock selection across both market segments. This strategy involves conducting detailed fundamental analysis, assessing corporate governance, financial strength, and competitive advantage.

A key element of the scheme's strategy is its allocation structure. Indicative allocations mandate that a minimum of 35% of total assets be invested in large-cap companies, while another minimum of 35% must be dedicated to mid-cap companies. The fund may allocate up to 10% towards units of InvITs (Real Estate Investment Trusts).

The scheme’s performance will be rigorously benchmarked against the Nifty Large Midcap 250 Index (TRI), which is mandated by SEBI and AMFI as the first-tier benchmark for this category. This alignment ensures direct comparability with industry standards.

Navigating Risk Profile and Derivative Exposure​

Investors should note that this scheme carries a very high level of risk, consistent with its mandate in equity markets. Equity investments are inherently volatile, and the fund is exposed to risks including market fluctuations, liquidity issues, and political or economic developments affecting sectors.

The fund intends to utilize derivatives as part of its management process. These instruments may be used for hedging purposes or portfolio balancing, subject to strict SEBI limits. The scheme has a maximum exposure limit of 50% of net assets in equity derivatives. Additionally, the gross exposure to repo transactions in corporate debt securities is capped at 10% of net assets.

Risk mitigation measures are integrated into the fund's operations. These include maintaining portfolio diversification and actively monitoring liquidity. The management emphasizes that all derivative products are leveraged instruments and can carry disproportionate losses, regardless of potential gains.

Understanding Fees and Load Structure​

The fund's cost structure has been defined to align with regulatory standards. The indicative aggregate fees and expenses charged to the scheme are structured up to 2.10% of the daily net assets, covering investment management, audit, and administrative costs.

The operational aspects include a clear policy regarding Exit Load. A 1% Exit Load is applicable if units are redeemed within one month from the date of allotment. If redemption occurs after one month, no Exit Load will be charged. This load structure remains capped at the maximum prescribed limit of 3%.

Subscription and Transaction Details​

The fund operates as an open-ended equity scheme, allowing continuous investment and redemptions on a NAV-based pricing system. During the New Fund Offer (NFO), the price per unit is set at Rs. 10/- for cash payment. The AMC ensures transparency by updating the Net Asset Value (NAV) of the scheme daily on both its website and AMFI’s platform.

The fund adheres to strict investment limitations, including not exceeding a 10% exposure in any single company's paid-up capital. All investments are made subject to prevailing SEBI regulations and must follow the prescribed guidelines regarding large and mid-cap categorization set by AMFI.