Top 5 Large Cap Mutual Funds

Below is the list of best performing Large Cap mutual funds to invest in India.


Name of Fund 5 Year Returns (p.a.) Scheme Category
Axis Bluechip Fund 13.50% Large Cap
ICICI Prudential Bluechip Fund12.90% Large Cap
Mirae Asset Large Cap Fund13.76% Large Cap
SBI Bluechip Fund14.01% Large Cap
Kotak Bluechip Fund14.24% Large Cap
These funds invest minimum 80% of its assets in large/bluechip companies.These funds are less volatile as they invest in index heavyweights.



Large-cap funds are those mutual funds that invest in equity shares of companies categorised under large market capitalisation. Large-cap organisations are reputable and trustworthy players with a well-established track record. These companies constitute the top 100 when it comes to market capitalisation, such as Asian Paints, Axis Bank, Dabur India, Infosys, and more.

Large-cap funds are ideal for those who need slow but steady returns over a period of time with relatively lower risk. Besides, these funds depend on your investment horizon and risk/return objectives.

Is it better to invest in large-cap funds than fixed deposit?

Due to demonetization in 2016 and availability of tax-saving mutual funds, the recent years have witnessed an exponential increase in the mutual fund investments. As a result, fixed deposits have become a less popular saving instrument among investors.

Many investors are now opting for large-cap funds due to less risk and stable returns on long-term investments. While the returns on FD is pre-determined by the banks, they remain the same throughout the tenure. Further, FD requires a lump sum amount, whereas large-cap funds do not require a lot of money to start investing. You could start with as low as Rs. 500 per month.

Which is riskier – Large Cap Funds or Mid Cap Funds?

Large-cap companies are relatively less risky than mid-cap ones as they are already well-established and provide stable returns and dividends to its investors. Mid-cap stocks, on the other hand, have more potential to expand than large-cap stocks. However, when such companies hit a rough patch, the stock prices fall, and it may take some time to bounce back.

This is why, mid-cap funds are considered more volatile, and risker than large-cap stocks and only those investors who have a long horizon and ability to cope with high risk should invest in them.



Advantages of large-cap funds

Large-cap funds offer various advantages to its investors.

  • Stable returns – Since these funds are invested in large and reputable companies that are less likely to become insolvent, they yield high and stable returns with minimal risk.
  • Low risk – As compared to small and mid-cap funds, large-cap funds fall under the low-risk category as the NAV (Net Asset Value) of such funds fluctuates less according to the market conditions. Hence, large-cap funds are ideal for investors with an appetite for low to moderate risk.
  • Investment horizon – This fund works best for investors with long-term investment horizons. You need to invest in large-cap funds for at least five to seven years to yield returns in the range of 12% - 15%.

Disadvantages of large-cap funds

If you thought large-cap stocks are free from any shortcomings, think again. Here are some of its disadvantages.

  • Lower returns – Though the prices of these funds are stable, they often yield low to average returns than small and mid-cap funds. This is because large companies are already established and have less growth potential. On the contrary, small and mid-sized organisations have high chances to grow.
  • Not recommended for risk-takers – If you have a high-risk appetite, then these stocks may not be the best bet for you since they provide regular and sustainable returns at a lower risk.
  • Investment horizon – Large-cap funds are not suitable for those investors who want to invest for a short tenure. These funds generate high returns only in the long-term.

Is it advisable to invest in large cap funds to build the retirement corpus of the individual ?

Large-cap funds can prove to be a prudent investment option for individuals to meet their retirement planning goals. Since these funds have a reasonable amount of risk and yield steady returns, many investors turn to these stocks to invest their retirement corpus. These schemes are also suitable for early-age retirement planners as they tend to generate high returns and good capital appreciation, on long-term investments, i.e., at least five to seven years.


Further Reading:

www.mutualfundssahihai.com

www.amfiindia.com

If you have any queries or suggestions, please contact us at bestadvisor2020@gmail.com.

Disclaimer

We do not offer any financial advice/recommendations through this website. This website should be used only for informational/educational/knowledge enhancement purposes.
Investment in mutual funds or any asset class comes with an inherent risk. This is just a web-based tool for getting a rough estimate about the future value of your SIP/lump sum investments. The calculations are based on projected annual returns and periods. The actual annual returns may be higher or lower than the estimated value and it may have a significant impact on the final returns/goals.
So, you are requested to kindly do your own analysis or hire an expert financial advisor/planner before making any investment decision.

Notice: I do not receive any "payment" or "fee" or "commission" for listing the funds on the website. You are requested to suggest any new features or report any error to help us to improve this website.

© Copyright 2020-2024 Top Five Large Cap Funds | All Rights Reserved