Stock markets see many new investors every day and most of them often have questions like, which stocks are the best, where should I invest my money, which stock will give more returns, etc. These questions are best addressed before diving into the stock market world, else it could result in losses. Every stock market investor must aim to gather sufficient knowledge of investment categories, types, strategies, etc before making an investment.
Stocks are mostly categorised as per their market capitalisation, also known as market cap. Market cap is a reflection of the company’s size. The three main stock classifications according to market cap are large-cap, mid-cap, and small-cap. A company’s size is a crucial factor to be considered while choosing stocks for investment. A large-sized company brings some unique opportunities as they are well established companies and therefore, many investors prefer large-cap fund investments. If you are keen on exploring large cap fund investments, here is all the information you will need to begin with.
What are Large Cap Funds?
Large cap funds are mutual funds that primarily invest in stocks of companies that have large market capitalization. Large cap companies are those which are well-established in the business segment and have a long positive track record. These companies have good corporate-governance and wealth-generation is often a slow and steady process.
Why invest in Large cap funds?
Since large-sized companies have a steady performance, investors can expect regular dividend payouts. As far as the risk-return is concerned, large-cap funds have mostly steady returns with a lower risk factor as compared to mid-cap and small-cap funds. Here are some features which make large cap funds an ideal investment choice:
- Large cap funds normally see significant capital growth apart from offering stability to investors.
- The investment value of large-cap funds is usually unaffected by frequent market volatility. These offer some level of security to investors as the NAV of such funds is mostly stable.
- Investors who are looking for diversification with moderate to low risk can opt for large-cap funds.
- Investors can expect returns in the long term. These are not ideal for investors who are looking for immediate profits.
Recommended Large Cap funds to invest in 2023
To help investors in their search for best investment options within large-cap funds, mentioned below are some details on Top-5 large-cap mutual funds in India.
ICICI Prudential Bluechip
About the fund
ICICI Prudential Bluechip Fund is an open-ended large-cap equity fund that offers growth and stability to investors’ portfolios. The fund aims to provide long-term capital appreciation through an equity portfolio that is mainly invested in large-cap stocks. It focuses on investments in blue-chip stocks which are diversified across various sectors.
|
Inception Date |
January 01, 2013 |
|
Benchmark Name |
NIFTY 100 Total Return Index |
|
Fund Manager |
Anish Tawakley |
|
Expense ratio |
1.67% |
|
Fund type |
Open-ended |
|
Risk |
Moderately high |
Historical Returns of the Fund (annualized)
| 6-month | 1-Year | 3-Year | 5-Year | 10-Year |
| 13.51% | 8.22% | 17.71% | 12.15% | 14.44% |
Axis Blue chip
About Fund
Axis Blue chip Fund is an open-ended large-cap equity scheme designed for investors who aim for capital appreciation in the long run. The objective of the fund is to offer long-term capital appreciation through portfolio diversification comprising equity and related securities of large-cap firms. It also offers portfolio diversification with a combination of equity and equity-related instruments, predominantly focused on large-cap firms.
|
Inception Date |
January 1, 2013 |
|
Benchmark Name |
S&P BSE 100 Total Return Index |
|
Fund Manager |
Shreyash Devalkar |
|
Expense ratio |
1.63% |
|
Fund type |
Open-ended |
|
Risk |
Very high |
Historical Returns of the Fund (annualised)
|
6-month |
1-Year |
3-Year |
5-Year |
10-Year |
|
9.41% |
-4.63% |
12.20% |
12.46% |
13.92% |
SBI Bluechip Fund
About the fund
SBI Bluechip Fund invests in large market capitalisation companies and about 20% of the fund in other securities like small cap and mid cap stock along with cash, cash equivalent and other instruments. The fund is an open-ended scheme and has S&P BSE 100 Total Return Index as benchmark.
|
Inception Date |
February 124, 2006 |
|
Benchmark Name |
S&P BSE 100 Total Return Index |
|
Fund Manager |
Ms. Sohini Andani |
|
Expense ratio |
1.60% |
|
Fund type |
Open-ended |
|
Risk |
Very high |
Historical Returns of the Fund (annualised)
|
6-month |
1-Year |
3-Year |
5-Year |
10-Year |
|
13.80% |
5.65% |
16.78% |
11.36% |
14.73% |
Mirae Asset Large Cap
About the fund
This is an open-ended equity fund that predominantly invests across large-cap stocks. The fund aims to achieve long-term capital appreciation through investments predominantly in equity and equity-related securities of large-cap companies. It follows a sector and theme-agnostic stock selection strategy. It focuses on investment across sector leaders who have a strong competitive advantage. It is suited to investors looking for an investment horizon of at least 3-4 years.
|
Inception Date |
April 04, 2008 |
|
Benchmark Name |
NIFTY 100 Total Return Index |
|
Fund Manager |
Gaurav Misra Gaurav Khandelwal |
|
Expense ratio |
1.58% |
|
Fund type |
Open-ended |
|
Risk |
Very high |
Historical Returns of the Fund (annualised)
|
6-month |
1-Year |
3-Year |
5-Year |
10-Year |
|
11.75% |
3.63% |
15.47% |
11.77% |
16.05% |
Canara Robeco Blue Chip Equity Fund
About the fund
This is an open-ended equity fund that predominantly invests across large-cap stocks. The fund aims to generate capital appreciation by predominantly investing in large-cap companies. It follows a sector and theme agnostic stock selection strategy. It focuses on investment across sector leaders who have a strong competitive advantage. It is suited to investors looking for an investment horizon of at least 3-4 years.
|
Inception Date |
August 20, 2010 |
|
Benchmark Name |
S&P BSE 100 Total Return Index |
|
Fund Manager |
Shridatta Bhandwaldar Vishal Mishra |
|
Expense ratio |
1.87% |
|
Fund type |
Open-ended |
|
Risk |
Very high |
Historical Returns of the Fund (annualised)
|
6-month |
1-Year |
3-Year |
5-Year |
10-Year |
|
11.92% |
2.68% |
17.02% |
14.08% |
13.66% |
Ways to Invest in Large Cap Funds
Now, you can easily invest in some of the best large cap funds by using the Fisdom app. Here are the steps you need to follow:
- Download and launch the Fisdom app on your smartphone
- Click on Équity on the home screen and select ‘large-cap’ option in the next step
- Click on ‘ínvest’ against the chosen fund option from the available list
- Select either ‘SIP’ or ‘Lumpsum’ investment and enter the amount
- Enter your basic details as shown on app.
- Follow the payment procedure to begin your investment
Things to Consider Before investing in Large Cap Funds
Large Cap Funds offer steady returns with comparatively lower risk. To gain good returns, investors should consider a five to seven-year horizon while investing in large cap funds. Here are some of the important things to consider before investing in these funds:
- Large Cap funds are not risk-proof: Large Cap equity funds do have several risks that are mainly market-related. However, these risks are significantly moderate as compared to small-cap or mid-cap funds.
- Consider the expense ratio: Large Cap funds do have expenses related to fund management. This affects the expense ratio of the fund. Hence, while choosing a fund, look for a lower expense ratio which can help in fetching higher profits.
- Work better for a longer investment horizon: Large Cap equity funds can fetch good returns in the medium to long run. It makes sense to remain invested for least three to five years in large cap funds so as to get reasonable returns.
- Are subject to Capital Gains Tax: Large Cap funds are subject to the same tax treatment as any other equity asset. Long term capital gains (LTCG) is applicable for an investment period of more than one year.
End Note
Large cap funds are ideal for investors who have lower risk tolerance. However, it is important to remember that these too are subject to market risks and investors must carefully assess their investment objectives against the fund objectives before making a decision.
Frequently Asked Questions
- What is a large cap fund?
Large cap funds are equity focussed funds that primarily invest in well-established and top companies which have an excellent performance track record.
- Which is the best large cap fund in India?
Some top-performing large cap funds in India are as below:
- ICICI Prudential Bluechip
- Axis Bluechip
- SBI Bluechip
- Mirae Asset Large Cap
- Canara Robeco Blue chip Equity Fund
- Are large cap funds safe investments?
Large cap funds offer relatively higher safety since they are focused on stocks of large and well-established companies which can withstand market fluctuations in the long run.
- What is the meaning of blue-chip funds?
Blue-chip is a term used for financially strong and well-established companies. A fund that invests primarily in blue-chip stocks is known as a blue-chip fund.
- How can I invest in a large cap fund?
You can invest in a large cap fund by using the Fisdom app. The app shows a list of top-performing large cap fund options, which makes the selection process easier.
- Why should I invest in a large cap fund?
You can invest in a large cap fund if your investment time horizon is long term. Also, it makes sense to choose this if you have a relatively lower risk appetite.
