Large cap mutual fund is a type of investment where your money is invested by buying units of multiple large-cap companies (those in the top 100). Large cap funds have a high potential of returns and equally high risk potential.
Here, we will tell you the best large cap mutual funds in India and the benefits of investing in these.
What is a Large Cap Mutual Fund?
In large cap funds, investor’s money is put in the stocks/ shares of the top 100 companies in the market. These companies are market leaders and offer the stability that mid-cap and small-cap funds may not.
That said, there are solid chances that the returns might be lower than mid-cap or small-cap equity investments at times.
Best Large Cap Mutual Funds in India, 2023
The following are some of the best large cap funds currently available in India:
| Large Cap Funds | Risk–Return |
| Axis Bluechip Direct | Very High-Above Average |
| Baroda PNB Paribas Large Cap Direct | Very High-Average |
| Canara Robeco Bluechip Equity Direct | Very High-High |
| Edelweiss Large Cap Direct | Very High-Above Avergae |
| HDFC Index S&P BSE Sensex Direct | Very High-High |
Check details of the best large cap mutual funds below:
- Axis BlueChip Direct Fund
| Year | Lumpsum (Rs 1 lakh) | SIP (Rs 10,000/month) |
| 1-Year Return | Rs 96,904 | Rs 1,18,828 |
| 3-Year Return | Rs 1,40,267 | Rs 4,21,036 |
| 5-Year Return | Rs 1,82,223 | Rs 8,13,042 |
| 10-Year Return |
2. Baroda PNB Paribas Large Cap Direct
| Year | Lumpsum (Rs 1 lakh) | SIP (Rs 10,000/month) |
| 1 Year | Rs 1,07,128 | Rs 1,24,240 |
| 3 Years | Rs 1,53,492 | Rs 4,56,325 |
| 5 Years | Rs 1,76,304 | Rs 8,70,792 |
3. Canara Robeco Bluechip Equity Direct
| Year | Lumpsum (Rs 1 lakh) | SIP (Rs 10,000/month) |
| 1 Year | Rs 1,03,953 | Rs 1,22,962 |
| 3 Years | Rs 1,61,378 | Rs 4,55,084 |
| 5 Years | Rs 1,96,567 | Rs 8,92,521 |
4. Edelweiss Large Cap Direct
| Period | Lumpsum (Rs 1 lakh) | SIP (Rs 10,000/month) |
| 1 Year | Rs 1,06,629 | Rs 1,24,781 |
| 3 Years | Rs 1,56,735 | Rs 4,62,686 |
| 5 Years | Rs 1,80,994 | Rs 8,69,051 |
5. HDFC Index S&P BSE Sensex Direct
| Period | Lumpsum (Rs 1 lakh) | SIP (Rs 10,000/month) |
| 1 Year | Rs 1,07,090 | Rs 1,24,695 |
| 3 Years | Rs 1,50,665 | Rs 4,62,863 |
| 5 Years | Rs 1,85,501 | Rs 8,66,646 |
Large Cap Mutual Funds: Things to Consider
The below-mentioned are some of the points you must consider before you invest in large-cap mutual funds:
The very first step of investment is to align the scheme’s goal with yours. If it’s not in sync, you need to find another scheme that meets your requirements.
- Check the fund’s performance
Before investment, it is crucial to check the past performance of the large cap fund to know whether it has crashed in the past and how much can you lose in the worst-case scenario. If the fund has been consistent in the returns and shows stability under pressure, take it as a yes.
- Check the exit load in the fund
Often overlooked by new investors, it is crucial to determine a figure. It may be around 1% to 2%. However, mostly it won’t go beyond 1% of the NAV. Also, not all MFs levy exit load.
- Know much you will have to spend
You need to know about the brokerage fee, mutual fund house fee, net asset value, and other hidden charges. Sometimes, the mutual houses that charge higher offer higher returns too.
Should I Invest in Large Cap Mutual Funds?
Large cap fund is more for conservative investors, considering it offers more stability and the fund’s asset allocation is more redirected towards securities issued by the blue-chip companies, hence the reason why these funds are stable.
As per SEBI regulations, in large cap mutual funds, minimum 80% of the scheme’s funds should be invested in large cap shares/ stocks. Over a long time, large cap mutual funds offer higher dividends, so you will keep receiving funds over a long period of time. The risk is lower as well in this investment and that is the key feature that conservative investors look out for.
Also, the large cap mutual funds offer more liquidity, meaning as an investor, you can liquidate your entire portfolio in case the market is going down.
Benefits of Investing in Large Cap Mutual Fund
Large cap mutual funds are heavy on returns and the safest funds to invest in for a beginner. Here’s why you should add a large cap mutual fund to your portfolio.
Investment Stability
Large-cap companies are already in the top 100. They have stable turnover, a business plan for at least the next 5 years and consistent income. Thus, the chances of these companies going in loss are really slim. Also, these companies have dividends which ensure constant wealth creation.
Resisting market loss
Large-cap companies can survive the market under extreme conditions. No matter the stock prices, or NIFTY, these companies will not let you take the fall. These bullish market trends bring down small-cap or mid-cap funds but not large cap funds.
Liquidity
In the current scenario, liquidity is crucial, especially when it comes to large cap mutual funds. As an investor, you can liquidate your portfolio if the need arises. If you are investing in large cap mutual funds, your managers can very easily buy or sell these stocks and can easily maximize the returns.
Word to Remember
NIFTY
National Stock Exchange Fifty, also known as NIFTY, is the index for NSE (National Stock Exchange). Its index currently reflects the market value of all the stocks in the index.
Large-Cap Mutual Funds: FAQs
Now that everything is digital, you can invest online as well as via fund houses. As per SEBI guidelines, minimum 80% of the fund’s assets will be allocated to large-cap stocks/shares.
This equity investment has a lower risk in comparison to small-cap and medium cap investments. The large cap has a more stable presence in the market as they are a part of the top 100 in the market with a turnover of more than Rs. 20,000 Crore.
You need to know various factors to determine whether the fund is worth investment or not. You will have to look at the company, its current turnover, past performance, current performance, etc.
Currently, Axis Bluechip Fund, Canara Robeco Bluechip Equity Fund, Edelweiss Large Cap Fund and Mirae Asset Large Cap Fund are some of the best large cap funds in India.
