In the previous article, we discussed the top 10 mid-cap mutual funds in India. In this article, we will discuss the top 10 large-cap mutual funds in India.
A large-cap fund is a fund that invests majorly in large-cap companies as per market capitalization. As per SEBI regulations, a large-cap fund is required to invest a minimum of 80% of its assets in large-cap companies through equity.
Benefits of Large-Cap Mutual Funds
- Relatively Low Risk: These funds invest in India’s top large-cap companies, which are very stable. Hence, it helps to lower the risk when compared to other categories of equity-oriented funds.
- High Liquidity: These funds hold the highest liquidity due to their size and reliability in the market.
- Stable Returns: Since these funds invest in large-cap companies, they have stability in the business. So, these funds provide stable returns to their shareholders.
Top 10 large mutual funds
| S.No. | Fund Name | 3-Yr Annualized Performance |
| 1 | IDBI India Top 100 Equity Fund Direct-Growth | 16.79 % |
| 2 | IDBI India Top 100 Equity Fund Direct Growth | 16.48 % |
| 3 | ICICI Prudential Bluechip Fund Direct Plan-Growth | 15.72 % |
| 4 | Kotak Bluechip Fund Direct-Growth | 15.21 % |
| 5 | Mahindra Manulife Large-Cap Pragati Yojana Direct-Growth | 15.07 % |
| 6 | Baroda BNP Paribas Large-Cap Fund Direct Plan – Growth Option | 14.65 % |
| 7 | SBI Bluechip Fund Direct-Growth | 14.44 % |
| 8 | Mirae Asset Large-Cap Fund Direct Plan-Growth | 14.13 % |
| 9 | Mirae Asset Large-Cap Fund Direct Plan Growth | 13.99 % |
| 10 | Invesco India Large-Cap Fund Direct Plan-Growth | 13.99 % |
Let’s look at these funds closely.
1. Canara Robeco Bluechip Equity Fund Direct Plan-Growth – Large cap mutual funds
Fund analysis:
The fund’s objective is to provide capital appreciation by predominantly investing in companies having a large market capitalization. The risk grade is low whereas the return grade is high.
The fund has 98.06% holdings in large-cap companies by market capitalization. The fund has a beta of 0.86 which means that the fund movement is very less relative to the market movement.
The fund has a lower risk (measured by standard deviation) than the category average.
| Pros | Cons |
| The fund is less risky when compared to other equity funds. Major holding is in Bluechip companies. | Not meant for investors with an aggressive risk appetite. |
2. IDBI India Top 100 Equity Fund Direct-Growth – Large cap mutual funds
Fund analysis:
The fund’s objective is to provide investors with opportunities for long-term capital appreciation by investing predominantly in Equity and equity-related Instruments of Large-cap companies.
The risk grade is below average whereas the return grade is high.
The fund has a well-diversified portfolio of 60 holdings. The top 10 holdings consist of 47.44%. It has invested in large-cap growth companies with 9.53% of exposure to mid-cap companies.
The fund has a lower risk (measured by standard deviation) than the category average.
| Pros | Cons |
| The fund has captured the market well when the market was falling and when the market was rising. The fund is less risky when compared to other equity funds. | The fund has low 5-Yr annualized returns. |
3. Kotak Bluechip Fund Direct-Growth – Large cap mutual funds
Fund analysis:
The fund is a consistent performer and has been rated 4 stars by Morningstar. The risk grade is average, and the return grade is high.
The fund has a beta of 0.95 indicating a balanced approach by the fund manager to aggressive and conservative stocks.
Along with investing in large-cap companies, the fund has exposure to mid-cap (11.48%) & small-cap (0.61%) companies. The fund has low risk (measured by standard deviation) than the category average.
| Pros | Cons |
| The fund is less risky when compared to other equity funds. The fund captured the market well when the market was falling and when the market was rising. | Not applicable |
4. UTI Master Share Growth Option Direct – Large cap mutual funds
Fund analysis:
The fund’s objective is to generate long-term capital appreciation by investing predominantly in securities of large-cap companies. The risk grade is below average, and the return grade is high.
The fund flows blend style of investing which indicates that the fund is holding both value and growth stock in the portfolio.
The fund has good assets under the management of Rs. 9,237.7 crore, which shows the reliability of investors. The fund has a lower risk (measured by standard deviation) than the category average.
| Pros | Cons |
| The fund is giving constant returns over the long term. The fund has good assets under management. | Fund follows the benchmark closely. |
5. Mahindra Manulife Large Cap Pragati Yojana Direct-Growth – Large cap mutual funds
Fund analysis:
The fund is one of the top-performing funds in its category. It has outperformed the category average over the long-term period. The fund is rated 5-star by Morningstar. The risk grade is below average, and the return grade is high.
The fund flows blend style of investing which indicates that the fund is holding both value and growth stock in the portfolio.
The fund has good assets under the management of Rs. 9,237.7 crore, which shows the reliability of investors. The fund has a lower risk (measured by standard deviation) than the category average.
| Pros | Cons |
| The fund is less risky when compared to other equity funds. Major holding is in Bluechip companies. | Low assets under management. |
6. Baroda BNP Paribas Large Cap Fund Direct Plan-Growth Option – Large cap mutual funds
Fund analysis:
The fund’s objective is to generate long-term capital growth from a diversified and actively managed portfolio of equity and equity-related securities by predominantly investing in large market capitalization companies.
The risk grade is low, and the return grade is high.
The fund has a low beta of 0.86 indicating that the movement of the fund is very less relative to the market movement. The fund has invested 98.54% in large-cap companies and the rest is in mid-cap & small-cap companies. The fund has invested across sectors.
| Pros | Cons |
| The fund is less risky when compared to its category. The fund has a well-diversified portfolio. | Fund has underperformed the benchmark. |
7. ICICI Prudential Bluechip Fund Direct Plan-Growth – Large cap mutual funds
Fund analysis:
The fund’s objective is to generate long-term capital appreciation and income distribution to investors from a portfolio that is predominantly invested in equity and equity-related securities of large-cap companies.
The risk grade is average, and the return grade is high.
The fund has a well-diversified portfolio of 74 holdings spread across sectors except for real estate. The portfolio has both value and growth stocks in its portfolio. The fund has a lower risk (measured by standard deviation) than the category average.
| Pros | Cons |
| The fund invests in both value & growth stocks. Fund has outperformed the benchmark & the category with a good margin. | Fund was not able to capture the market well when it was rising. |
8. SBI Bluechip Fund Direct-Growth – Large cap mutual funds
Fund analysis:
The fund’s objective is to provide investors with opportunities for long-term growth in capital through active management of investments in a diversified basket of large-cap equity stocks (as specified by SEBI/AMFI from time to time). The risk grade is above average, and the return grade is high.
The fund has a beta of 1.00 indicating fund movement is very much dependent on the market movement. The fund is rated 3-star by Morningstar.
The fund has a relatively high risk (measured by standard deviation) than the category average
| Pros | Cons |
| The fund has a well-diversified portfolio. The fund invests in both value & growth stocks. | Fund was not able to capture the market well when it was falling. |
9. Mirae Asset Large Cap Fund Direct Plan-Growth – Large cap mutual funds
Fund analysis:
The fund has outperformed the benchmark and the category marginally over the long-term period. The fund is rated 4-star by Morningstar. The risk grade is average, and the return grade is high.
The fund follows a blended style of investing, which means it has both value and growth stocks in its portfolio. The fund has a lower risk (measured by standard deviation) than the category average.
| Pros | Cons |
| The fund is equally volatile with its category average. The fund is a consistent compounder. | Very high assets under management. |
10. Invesco India Large Cap Fund Direct Plan-Growth – Large cap mutual funds
Fund analysis:
The fund has a balanced portfolio of 40 stocks, investing in value and growth stocks across market capitalization with major holdings in large-cap (93.50%) companies and the rest in mid-cap & small-cap companies.
The risk grade is average, and the return grade is high.
The fund is rated 3-star by Morningstar and the fund has given satisfactory returns over the long term. The fund has low risk (measured by standard deviation) than the category average.
| Pros | Cons |
| The fund was not able to capture the market well when it was rising. | Fund was not able to capture the market well when it was rising. |
Advantages of Investing in Large-Cap Funds
1. Stable investment option
Large-cap funds invest in top companies that are financially sound and have an excellent track record of performing well in the markets.
They have solid business plans, and their revenue is consistent. The chances of the funds of these companies getting affected by small market fluctuations are low.
These companies also give their investors dividends which help them create wealth.
2. Investors can make informed decisions
Large-cap funds invest in blue-chip companies. These companies are well-established and have been active in the market for a long time.
So, investors can check their past performance and make wise investment decisions.
3. Liquidity
Large-cap funds offer high liquidity, which makes it easier for investors to withdraw the investment amount during adverse market conditions without having to incur a major loss.
Disadvantages of Investing in Large-Cap Funds
1. Management fees
Large-cap funds invest in top companies in every sector, and the fund management fees are usually high compared to other funds.
The exit load of certain plans is 1%, which investors have to pay if they withdraw the investment within the minimum holding period.
2. Returns
Large-cap funds may not give returns as high as mid-cap or small-cap funds. This is because the top companies already hold a huge chunk of shares, and their gains may be in small increments.
Who should invest in large-cap mutual funds?
Large-cap mutual funds are most suitable for investors who don’t want to take much risk and are happy with stable returns.
Large-cap funds are ideal if investors want to invest for more than 5 years and are expecting average returns.
Newcomers can opt for large-cap funds because it has the potential to manage fluctuations in the market and also offers better returns than bank deposits on most occasions.
Things to consider before investing in the best large-cap funds
- Understand the risk and returns of the ratio of the large-cap funds
- Average returns compared to small-cap and mid-cap funds
- High expense ratio- Management fees are on the higher side
- This fund is suitable for long-term investors
- Income gained from the mutual fund is taxable
How to choose the best large-cap mutual funds?
Consider your financial goal and assess if investing in large-cap mutual funds can help you reach your goal.
If you are planning to invest in the long-term, which is between 5 to 15 years, and you are risk averse, you could consider investing in large-cap funds.
Investors who have short-term goals and expect higher returns may not be interested in investing in large-cap funds. Select a fund with a lower expense ratio, as large-cap funds usually charge higher management fees than others.
FAQs
What are large-cap funds?
Large-cap funds invest in the best companies in every sector that are well-established and have a great track record. Large-cap funds invest a large portion of the corpus in blue-chip companies.
Which large-cap fund is the best?
Canara Robeco Bluechip Equity Fund Direct Plan-Growth
IDBI India Top 100 Equity Fund Direct-Growth
Kotak Bluechip Fund Direct-Growth
UTI Master Share – Growth Option Direct
Mahindra Manulife Large-Cap Pragati Yojana Direct-Growth
Baroda BNP Paribas Large-Cap Fund Direct Plan – Growth Option
ICICI Prudential Bluechip Fund Direct Plan-Growth
SBI Bluechip Fund Direct-Growth
Mirae Asset Large-Cap Fund Direct Plan-Growth
Invesco India Large-Cap Fund Direct Plan-Growth
Is large-cap a good investment?
Large-cap funds invest most of the funds in well-established companies with a great track record, making investing in these funds less risky. These funds also give stable returns over the long term. Investors looking to invest in the long-term with minimal risk prefer large-cap funds over other funds.
What are the benefits of large-cap funds?
- Stable investment option
- Investors can make informed decisions because of the excellent track record of the funds
- Liquidity
- Low risk compared to mid-cap and small-cap funds
Which is the best-performing large-cap mutual fund in the last 10 years?
Ans. Data shows that the Nippon India Large Cap Fund, Kotak Emerging Equity Fund, and Nippon India Small Cap Fund have provided the highest returns in the respective large–, mid-, and small-cap categories during the last 10 years.
Is large-cap fund good for the long term?
Ans. With the top large-cap funds, you can rest easy knowing that your money is going into businesses with a proven track record of success over the medium to long term. These funds tend to carry less risk than small-cap and mid-cap funds, making them an excellent choice for risk-averse investors.
Which type of MF gives the highest return?
Ans. Growing SBI Small Cap Fund. As of August 16th, 2021, the SBI small-cap fund has an AUM of INR 9,620.21 crore, an expense ratio of 0.84%, and a Net Asset Value (NAV) of INR 102.68. The fund has a very high level of risk; hence the minimum SIP is INR 500.
Conclusion:
For any investor who is looking to take equity exposure with low risk, then large-cap mutual funds are the right investment option. One could expect stable returns from these funds.
Consult an expert advisor to get the right plan for you
Disclaimer:
This is not recommendation advice, use it for educational purposes only. Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including fluctuations in the interest rates.
The past performance of the mutual funds is not necessarily indicative of the future performance of the schemes
