Why you should invest in Large Cap Mutual Funds ?

Are you a frequent equity investor? Looking for less volatility schemes? You have landed on right page. With current dynamic marker trend, major portion of investors are considering to invest in Largecap mutual funds schemes with investment tenor of 5-7 years to achieve long-term financial goals. Largecap mutual funds schemes will definitely create wealth over a long period without too much risk bearing.

What is Large Cap Mutual Funds:

As symbolised by its name, Large Cap Mutual funds are MF schemes which invest 80% of their funds in 100 of the biggest companies listed in Stock exchange and also the portfolios with large market capitalisation. Funds manager and Mutual fund companies have different approach and researches to classify funds as “Large cap Mutual funds”.

Portfolios with market capitalization of ₹1000 crores and above are considered as Large Cap companies. Also the risk bearing on large cap funds are less as compared with mid and small cap funds. In addition, the return on investment in large cap funds is comparatively very less to mid and small cap funds.

Why to Invest in Large cap Mutual funds:

Large cap portfolios are considered to be more reliable with strong goodwill, and are financially strong. Majorly Large cap companies exists over a period of time, so they have a track record.

Reason being their size you can find plenty of research studies on these corporate organisations in the market. These companies follow strong corporate governance practices. Investors who put their money in such companies see a slow and gradual rise in their wealth over the long term.

Below are common leads of Large cap mutual funds.
– Large cap MF gives better ROI in short term.
– Steady wealth creation and regular dividends pay-out.
– Large cap mutual funds offers steady and low-risk returns.
– Investors with low risk tolerance can benefit from investing in large-cap funds.
– Large cap MF can endure bear market.
– Provides higher returns than Public provident funds and Debentures.

Top 4 Largecap Mutual Funds:

Before you start investing in large cap mutual funds, let me list down top 4 large cap mutual funds which are promising and have proven record in the market.

Scheme name1-yr returns (%)3-yr returns (%)5-yr returns (%)
Axis Bluechip Fund7.2811.7911.79
HSBC Large Cap Equity Fund0.5811.4213.11
ICICI Prudential Bluechip Fund2.1812.3115.31
SBI Bluechip Fund-1.469.6016.44

Key take away:

Large cap Mutual funds are idyllic for first time investor in Mutual fund. Considering major portion of the funds is invested in Large cap portfolios with 1000 cores and above capital, investments are pretty much secured. Large cap companies are financially backed and goodwill also creates a major impact.

Moreover, Mutual Fund manager also plays a vital role in the performance of MF, as he/she decides on the allocation of other small portion. This small portion sometimes give a very higher return or sometimes forfeit the existing yield profit.

Khalid Ahmad Author

Khalid Ahmad is an MBA and finance enthusiast with 10 years as finance consultant and a passionate blogger, running the personal finance blog, EasytechBank.com. He shares knowledge and simplifies things in the field of finance and investment for the common people.