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.
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.
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.
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 Fund
Can 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.