In the fast-paced and ever-changing world of investments, one asset class has consistently proven its resilience and ability to weather market storms – large-cap funds.
This dedicated article on large-cap funds is tailored for readers seeking a comprehensive overview of large-cap mutual funds. Keep reading!
Large-cap Funds – Meaning & Explanation
In Indian stock exchanges, companies with a market capital over ₹20000 crores are considered large-cap companies. These companies are generally well-established and have a lower risk profile.
Mutual funds with the primary objective of investing in stocks of large-cap companies are called large-cap funds. These funds aim to provide its investors with stability and the potential for steady growth over time.
[Also Explore]: Small-Cap funds | Mid-Cap Funds | Multi-Cap Funds | Flexi-Cap Funds
Which Large Cap Fund Is Best?
Mutual fund investments are always subject to market risks. Hence, No one can predict the best large-cap fund of the future. However, here below is the list of best-performing large-cap funds based on their 5-year past performances.
| Fund’s Name | 3-Year CAGR | 5-Year CAGR |
| Canara Robeco Bluechip Equity Fund | 21.81% | 15.18% |
| Nippon India Large Cap Fund | 29.96% | 15.01% |
| ICICI Prudential Bluechip Fund | 24.55% | 14.11% |
| Kotak Bluechip Fund | 22.55% | 13.87% |
| SBI Bluechip Fund | 24.25% | 13.69% |
| Mirae Asset Large Cap Fund | 21.27% | 13.49% |
| Axis Bluechip Fund | 16.71% | 11.59% |
Sidenote! Apart from past performances, there are various other crucial factors to consider before choosing a mutual fund.
Risks And Returns of Large-cap Funds
Risks & returns are critical considerations when making investment decisions. Large-cap funds present an attractive option for those who prioritize stability and reliability.
Even if these funds offer better stability than small-cap & mid-cap funds, the potential for growth is comparatively low.
So, risk-conscious investors who prefer stability & feel comfortable with respectable returns may find large-cap funds an appealing investment option.
Taxation
As these funds are considered equity mutual funds, they are subject to tax like equity mutual funds.
A. Short-Term Capital Gains (STCGs): If you sell your investments before the holding period of one year, a tax of 15% will be deducted on gains on investments.
B. Long-Term Capital Gains (LTCGs): If you sell your investments after the holding period of one year, an LTCG of up to 1 lakh is tax-free. Over this amount, a tax of 10% will be deducted from gains on investments.
C. Dividend Income Taxes: Dividend income is now subject to tax in the hands of investors as regular income and taxed according to applicable income tax slab rates.
How To Invest In Large-Cap Funds
Nowadays, with a large number of investing platforms, investing in mutual funds has become as simple as ordering a pizza online.
The first thing you need is a mutual fund investment account. Many platforms provide it once you open a Demat account with them & complete your KYC.
After opening the account, various investment options are available to invest in. You choose the desired large-cap mutual fund & make the payments.
Additionally, there are different investment modes such as SIP, lump sum, dividend payout etc. You can choose according to your needs.
Alternative Ways To Invest In Large-Cap Companies
Investors who want to invest in large-cap companies may also explore alternative ways to invest.
- Large-cap ETFs- Large-cap ETFs hold a diversified portfolio of large-cap assets. These ETFs are bought and sold on exchanges just like stocks.
- Large-cap Index Funds- Large-cap index funds are low-cost options to invest in large-cap assets.
- Direct Investments- You can also pick large-cap companies according to your interests and invest in them directly.
FAQs
What are Some Examples Of Large-cap Funds?
Some examples of Large-cap funds are:
1. Mirae Asset Large Cap Fund
2. SBI Bluechip Fund
3. Kotak Bluechip Fund
4. ICICI Prudential Bluechip Fund
5. Nippon India Large Cap FundCan I Do SIP in Large-cap Mutual Funds?
A systematic Investment Plan (SIP) is a popular investment method. You can easily do SIP in Large-cap mutual funds.
Do large-cap Funds Pay Dividends?
If a large-cap fund has invested in some dividend-paying companies, it gives its investors the option to receive dividend payouts.
Which is Better, Index Fund or Large-cap Fund?
It needs to be understood first that index funds are passively managed while large-cap funds are actively managed.
Index funds aim to replicate the performance of an index while large-cap funds aim to beat the performance of their benchmarks.Are Large Cap Funds Safe?
Large-cap funds are considered safe compared to small-cap & mid-cap funds. Large-cap funds invest in well-established companies with a proven track record of financial performance.
What are large & Mid-cap funds?
Large & mid-cap funds invest in a mix of stocks of large-cap (Market cap over ₹20000 cr) & mid-cap (Market cap between ₹5000 and 20000 cr) companies. These funds aim to provide some level of stability with good growth potential.
