According to the Securities and Exchange Board of India, Large-cap companies are entities that are ranked between 1 to 100 in terms of market capitalisation. Mutual funds that invest a major portion of their capital in large-cap or blue-chip companies are known as large-cap funds.
Large-cap companies, and by extension large-cap funds, are known to be much safer, more stable and resistant to market downturns. This makes them a great investment option for moderate risk-taking investors. Since these companies are well-established and fundamentally strong, their future growth prospects are not as bright as say small-cap or mid-cap companies.
That said, large-cap companies often offset the lack of capital appreciation prowess by offering dividends regularly, which can act as a source of passive income for the investor. However, you should also note that not all large-cap mutual funds offer the same level of performance. That’s why it is important to invest only in the best-performing large-cap mutual funds. Here are a few of them that you can consider.
Launched in 2010, the Canara Robeco Bluechip Equity fund invests exclusively in large-cap companies. Some of the entities in its portfolio include HDFC Bank, ICICI Bank, Infosys, Reliance Industries and State Bank of India. The fund has total Assets Under Management (AUM) of about ₹8,672 crores, which have been allocated across 10 sectors.
The top 5 sectors where the fund has invested are financial services, technology, consumer cyclical, consumer defensive and energy. During the previous three-year period, the Canara Robeco Bluechip Equity Fund delivered around 22.1% returns. As of March 20, 2023, the NAV of the fund was ₹39.81.
Another one of the top-performing large-cap mutual funds is the SBI Bluechip Fund. Established in 2006, the fund currently has a total AUM of about ₹33,987 crores. The top stocks in the mutual fund’s portfolio include HDFC Bank, ICICI Bank, ITC and Larsen & Toubro. When it comes to sector allocations, financial services, consumer cyclical, industrials and healthcare are at the top.
The fund has generated around 25.8% returns in the previous three-year period and has a low expense ratio of just 1.64. As of March 20, 2023, the Net Asset Value of the SBI Bluechip Fund was around ₹60.74.
Launched in 2008, the ICICI Prudential Bluechip Fund invests in large-cap companies across 11 different sectors. Financial services, technology, energy, consumer cyclical and industrials are the top 5 sectors in terms of fund allocation. With a total AUM of about ₹34,198.5 crores, the fund has invested in big names such as Reliance Industries, ICICI Bank, Axis Bank, Maruti Suzuki India and Bharti Airtel.
As far as the expense ratio of the fund is concerned, it is quite low at just 1.67. And over the previous three-year period, ICICI Prudential Bluechip Fund has generated stellar returns to the tune of 27%. The NAV of the large-cap mutual fund was ₹66.28 as of March 20, 2023.
Launched in 1998, the Kotak Bluechip Fund is another one of the best-performing large-cap mutual funds in India. Out of the total AUM of ₹5,259.2 crores, around 98.5% have been invested in the equity market across 11 different sectors. Financial services, consumer cyclical, technology and consumer defensive are the top stocks in terms of fund allocation.
The mutual fund portfolio contains top large-cap companies like Tata Consultancy Services, Housing Development Finance Corporation, Mahindra & Mahindra and Hindustan Unilever. The three-year returns generated by the fund are around 25%, with its NAV being ₹364.16 as of March 20, 2023.
Launched in 2012, the IDBI India Top 100 Equity Fund invests in the top 100 companies in terms of market capitalization. This includes stocks like Bajaj Finance, Titan Company, HCL Technologies, DLF and Sun Pharmaceuticals. With investments in as many as 10 different sectors, the fund offers a great level of diversification.
As of March 20, 2023, the NAV of the fund was ₹38.06 and the total Assets Under Management (AUM) at around ₹599.726 crores. Although it is one of the top-performing large-cap mutual funds in India, the expense ratio of the fund is on the higher side at around 2.46.
The above list of funds is only meant to be illustrative and not exhaustive. Before you proceed to invest, always ensure that you do your due diligence. Take into account factors such as past performance, expense ratio and the experience of the fund management team. This will ensure that you invest in only the top-performing large-cap mutual funds.
That said, one of the prerequisites to investing in mutual funds is a demat account. If you have one already, you can proceed to start investing right away. However, if you don’t possess one, Motilal Oswal can help you open a demat account within minutes. Simply head to the official website of Motilal Oswal and click on the ‘Open Demat Account’ button on the homepage. Follow the instructions to get your hands on a 2-in-1 trading and demat account for free.