While the stock market is extremely volatile, some conservative investors are contemplating investing in mutual funds, thereby outsourcing their investing decisions to the experts. If you are also one of them, it is important to remember that one of the safest mutual fund categories, among equity, is large-cap funds.
Although the average returns posted by the large-cap funds are somewhat muted, they are relatively more stable and consistent, unlike the mid-cap and small-cap funds which may beat your expectations by a wide margin in a year but only to retreat soon after.
Therefore, it is recommended that you have decent exposure to large-cap stocks or large-cap mutual funds so that your portfolio does not fluctuate too widely in a year.
Large-cap funds
For those who are not aware, large-cap funds are mutual funds which invest a minimum of 80 per cent of their assets in large-cap stocks, as per the Sebi’s categorisation of mutual fund schemes.
Large-cap stocks refer to the securities of the top 100 listed companies in India when you rank companies based on their market capitalisation.
This means if a large-cap mutual scheme has assets under management (AUM) of ₹1,000 crore, then ₹800 crore must be invested in the large-cap stocks and the remaining 20 per cent in the remainder of categories, including cash, mid-cap, small-cap and bonds.
(Source: AMFI, returns as on January 28, 2025)
As the table shows, the top-performing large-cap funds are Canara Robeco Bluechip Equity Fund (12.07 per cent), ICICI Prudential Bluechip Fund (12.53 per cent) and Nippon India Large Cap Fund (12.46 per cent).
The largest funds, in terms of assets, are the ICICI Prudential Bluechip Fund ( ₹61,714.99 crore), the SBI Bluechip Fund ( ₹48,062.06 crore), and the SBI Bluechip Fund ( ₹48,062.06 crore).
Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment-related decision.
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