Best Large Cap Mutual Funds 2024

Extensive financial track records and a published history of their performance across the market and economic cycles offers investors better insight into the strength of the portfolio.

The real growth in an investor’s wealth comes from staying invested for the long term, usually more than 5-7 years. However, investing lump sum when the markets are high (usually, it means the large cap stocks are also high) exposes investors to a likely correction and drop in their portfolio value. If an investor requires money during corrections and ends up selling, he could experience a real loss and certainly poor returns even though he has invested in a large cap fund.

It is important that investors are able to manage their fear and stay invested. Maintaining a diversified portfolio, across asset classes helps in staying invested in the market.

When you invest in a mutual fund, what you are really buying is the stock portfolio of that particular fund. It’s then common sense that the first thing you check is its portfolio quality. And how it compares with other large cap funds in the market.

What is the proportion of risky companies? What sector is the fund focussing on? Since safety is of primary importance when investing in a large cap fund, you’re better off staying with the best quality funds.

A quick google search for the best large cap funds to invest in" will lead you to many sites recommending top-performing funds based on their performance in the past 3, 5 and 10 years. However, this method could sometimes be inadequate and misleading.

A better way to assess a fund’s return performance is to look at rolling returns across different time periods, say 3 or 5 years. This removes the starting/ending point bias present in point to point past performance used across the industry.

Past performance is no guarantee for the future. Thus, choosing a mere top past performer is unlikely to be a winning strategy.

However, a manager who has outperformed his benchmark across market cycles is more likely to do so in the future too. Avoiding funds with poor return consistency will take the investor a step closer to building a winning portfolio.

Every fund charges you with a fee to manage your funds, more commonly known as the expense ratio So among the funds that fulfil your other criteria, choose the fund with the lowest expense ratio.

Apart from this, there are other hidden costs in an MF such as brokerage and impact cost. These can be reduced by choosing a fund that churns the portfolio less frequently. Because, ultimately, these costs are to be borne by the investor, and they account for a compromise in returns.

The Mirae Asset Large Cap Fund predominantly invests in large cap companies (within the top 100 according to market capitalisation). The Fund displays a certain flexibility when it comes to investments, showing interest across various sectors of the industry, focusing specifically on high quality businesses but also ensuring the right price over the holding period.

For more details click on MoneyWorks4me’s assessment of Mirae Asset Large Cap Fund

The scheme invest largely in large cap companies. The fund has done well since current Fund manager, Shreyash Devalkar, joined the fund house in November 2016. The fund manager’s focus has been on quality and growth companies i.e. selecting companies with high return on equity (RoE), revenue and margin growth, and market penetration.

For more details click on MoneyWorks4me’s assessment of the Axis Bluechip Fund

This fund is ideal for investors looking at a holding period of three to four years, after which the fund stands to yield high returns. But investors must also be prepared for adversity as this portfolio is prone to moderate risks. Apart from investing in equity and equity-related instruments of large capital companies, this fund also seeks to generate returns by investing in securities, InvITs, and REITs.

For more details click on MoneyWorks4me’s assessment of Nippon India Large Cap Fund

A suitable fund for those investors that aren't willing to take too much of a risk, while also expecting a reasonable rate of returns. This is an ideal fund to invest in with medium-term goals focusing on wealth creation or planning a comfortable retirement.

For more details click on MoneyWorks4me’s assessment of the SBI Bluechip Fund

Unlike most large cap funds, this equity fund is diversified across market capitalizations. The fund’s managers take a contrarian approach and look for undervalued companies for investment. Thus, the fund is usually faced with short term underperformance but adds significant value over a market cycle in the long term.

For more details click on MoneyWorks4me’s assessment of the Invesco India Large Cap Fund

1. Do I have a long enough time horizon required for equity investing?
2. Does the Mutual Fund I choose suit my risk profile?
3. Do I understand what I am buying or am I blindly investing in a Fund on the insistence of my friends, acquaintances or Mutual Fund Distributors (who earn commissions on what they sell to me)?
4. Am I over-exposed to one Fund or one type of Funds? Do I know if I have a good combination of Funds?

While it’s true that Mutual Funds in India can be a good investment option, you shouldn’t forget that they have an inherent market risk associated with them. Risks are inevitable, because we are dealing with estimated values in the future, and the future remains uncertain. Understanding risks will help you take action to control and manage them. And, then your expectations can be adjusted to do justice to the risks you have taken.

1. Consistent Outperformers : Track record of having generated returns above a benchmark on a 3-year rolling basis. Consistent performers are Green, followed by Orange. Red have an inconsistent track record on outperforming the index.
2. The average 3-year rolling returns number appears in the first button.
3. Quality of Portfolio is assessed based on the quality of each stock held. Predominantly high quality stocks get a Green second button, followed by Orange and Red (large amount of risky stocks).
4. Upside Potential: Every fund is assessed on what returns it could deliver in the next 5 years based on it.