Last Updated on Apr 3, 2023 by Harshit Singh
The Indian stock market categorises listed companies based on their market capitalisation, which refers to the total worth of a company. There are three categorisations of market cap – large cap, mid cap, and small cap. Also known as blue chip stocks, large cap stocks are shares issued by a company with over Rs 20,000 cr. Mutual funds primarily investing in such stocks are called large cap funds or blue chip mutual funds. In this blog, we have encapsulated the list of the top 10 large cap mutual funds based on their 5-yr CAGR. But before we delve deeper, let’s understand the terms that we will frequently be mentioning in this blog –
Table of Contents
What is a large cap stock?
Large cap stocks belong to NIFTY 100. It boasts of companies that are leaders in their sectors and are perceived to be less risky. Moreover, large cap stocks are touted to be the most stable stocks as they are of established and reputed companies. Therefore, investors who want to approach a less risky route to wealth creation invest in large cap stocks as they are known for their stability in the market.
What are large cap mutual funds?
Simply put, large cap mutual funds are equity funds that invest in the top 100 stocks of India based on their market capitalization. These stocks are primarily leaders across market sectors. Also known as blue chip mutual funds, they are less risky than mid and small cap funds as market movements do not heavily impact them. These are stable and generate consistent returns compared to mid and small cap funds.
Top 10 large cap mutual funds in India
If you are looking for the best mutual funds to invest in 2023 in the large cap category, we have filtered the top 10 offerings by various AMCs below.
Note: The data is as of 31st March 2023, and the parameters used to filter the large cap funds are:
- AUM (Assets Under Management)
- 3-yr CAGR
- 5-yr CAGR – set from high to low
- NAV (Net Asset Value)
| Name | AUM (Rs. in cr.) | CAGR 3Y (%) | CAGR 5Y (%) | NAV |
| Canara Rob Bluechip Equity Fund | 8642.19 | 25.52 | 14.62 | 45.66 |
| Edelweiss Large Cap Fund | 390.72 | 27.59 | 13.06 | 61.19 |
| Baroda BNP Paribas Large Cap Fund | 1347.24 | 24.44 | 13.01 | 158.06 |
| Kotak Bluechip Fund | 5259.24 | 28.02 | 12.91 | 415.91 |
| Nippon India Large Cap Fund | 12535.60 | 31.83 | 12.70 | 59.05 |
| ICICI Pru Bluechip Fund | 34198.52 | 29.37 | 12.58 | 73.2 |
| IDBI India Top 100 Equity Fund | 603.11 | 27.09 | 12.57 | 43.48 |
| Mirae Asset Large Cap Fund | 32910.58 | 26.78 | 12.51 | 84.47 |
| Axis Bluechip Fund | 33049.77 | 18.17 | 12.26 | 46.7 |
| HDFC Top 100 Fund | 22427.91 | 29.57 | 12.11 | 786.24 |
Canara Rob Bluechip Equity Fund
Sitting on an AUM of Rs 8642.19 cr., this large cap fund has an expense ratio of 0.48%. The fund has grown at a 3-yr CAGR of 25.52% and a 5-yr CAGR of 14.62%, which showcases its stability to generate consistent returns in the long-term. The fund is managed by Shridatta Bhandwaldar and Vishal Mishra, having an experience of 10 yrs each.
Minimum lumpsum amount – Rs. 5000
Benchmark – S&P BSE 100 – TRI
Sector Distribution – Private Banks, IT Services & Consulting, Oil & Gas – Refining & Marketing, Construction & Engineering, Specialized Finance, among 27 other sectors.
Edelweiss Large Cap Fund
Having an AUM of Rs 390.72 cr., this bluechip fund is managed by Bharat Lahoti (experience of 9yrs) and Bhavesh Jain (5yrs experience). While the expense ratio of the fund is 0.93%, the 3-yr CAGR is 27.59%, and the 5-yr CAGR is 13.06%.
Minimum lumpsum amount – Rs. 5000
Benchmark – NIFTY 100 – TRI
Sector Distribution – Private Banks, IT Services & Consulting, Oil & Gas – Refining & Marketing, Construction & Engineering, FMCG – Tobacco, among 25 other sectors.
Baroda BNP Paribas Large Cap Fund
Sitting on an AUM of Rs 1,347.24 cr., this blue-chip fund has an expense ratio of 0.94%. Talking about the mutual fund returns, the 3-yr and 5-yr CAGRs are 24.44% and 13%, respectively. The fund is managed by Jitendra Sriram.
Minimum lumpsum amount – Rs. 5000
Benchmark – NIFTY 100 – TRI
Sector Distribution – Private Banks, IT Services & Consulting, Oil & Gas – Refining & Marketing, Construction & Engineering, among 29 other sectors.
Kotak Bluechip Fund
This fund by Kotak Mutual Fund has an AUM of Rs 5259.24 cr. and an expense ratio of 0.64%. The large cap fund is managed by Harish Krishnan, who comes with an experience of 9 yrs. The 3-yr and 5-yr CAGRs of the fund are 28.02% and 12.91%, respectively.
Minimum lumpsum amount – Rs. 1000
Benchmark – NIFTY 100 – TRI
Sector Distribution – Private Banks, IT Services & Consulting, Oil & Gas – Refining & Marketing, Construction & Engineering, Four Wheelers, among 24 other sectors.
Nippon India Large Cap Fund
This large cap fund has an AUM of Rs 12,535.60 cr. and an expense ratio of 1.01%. The 3-yr and 5-yr CAGRs of the fund are 31.83% and 12.70%. The fund is managed by Sailesh Raj Bhan, who has an experience of 10 yrs and Ashutosh Bhargava, who comes with 12 yrs of experience.
Minimum lumpsum amount – Rs. 100
Benchmark – S&P BSE 100 – TRI
Sector Distribution – Private Banks, Oil & Gas – Refining & Marketing, IT Services & Consulting, Hotels, Resorts & Cruise Lines, Construction & Engineering, among 26 other sectors.
ICICI Pru Bluechip Fund
Managed by two fund managers – Anish Tawakley and Vaibhav Dusad, this large cap fund sits on an AUM of Rs 34,640.35 cr. While the 3-yr CAGR of the fund is 29.37%, the 5-yr CAGR is 12.58%. The fund has an expense ratio of 1.06%.
Minimum lumpsum amount – Rs. 100
Benchmark – NIFTY 100 – TRI
Sector Distribution – Private Banks, IT Services & Consulting, Construction & Engineering, Oil & Gas – Refining & Marketing, among 31 other sectors.
IDBI India Top 100 Equity Fund
This large cap fund has managed to generate returns more than fixed deposits. The 3-yr CAGR of the fund is 27.09%, the 5-yr CAGR is 12.57%, which showcases its potential to generate consistent returns over the long-term.
Minimum lumpsum amount – Rs. 5000
Benchmark – NIFTY 100 – TRI
Sector Distribution – Private Banks, IT Services & Consulting, Oil & Gas – Refining & Marketing, Public Banks, Construction & Engineering, among 29 other sectors.
Mirae Asset Large Cap Fund
Gaurav Misra, with an experience of 23 yrs and Gaurav Khandelwal having an experience of 5yrs manage this large cap mutual fund. Sitting on an AUM of Rs 32,910.58 cr., this fund has 3-yr and 5-yr CAGRs of 26.78% and 12.51%, respectively. The fund has an expense ratio of 0.54%.
Minimum lumpsum amount – Rs. 5000
Benchmark – NIFTY 100 – TRI
Sector Distribution – Private Banks, IT Services & Consulting, Oil & Gas – Refining & Marketing, Pharmaceuticals, Construction & Engineering, among 29 other sectors.
Axis Bluechip Fund
This large-cap mutual fund offered by Axis Mutual Fund has an AUM of Rs 33,049.77 cr. While its expense ratio is 0.63%, its 3-yr and 5-yrs CAGRs are 18.17% and 12.26%, respectively. Shreyash Devalkar (5 yrs experience) and Vinayak Jayanath manage the fund.
Minimum lumpsum amount – Rs. 500
Benchmark – S&P BSE 100 – TRI
Sector Distribution – Private Banks, Investment Banking & Brokerage, IT Services & Consulting, Specialized Finance, Retail – Speciality, among 20 other sectors.
HDFC Top 100 Fund
This large cap fund boasts an impressive 3-yr CAGR of 29.57% which is suitable for investors who are looking to achieve short-term financial goals. With the principle investment being at very high risk, it is advisable to consult a SEBI certified financial advisor before investing.
Minimum lumpsum amount – Rs. 100
Benchmark – NIFTY 100 – TRI
Sector Distribution – Private Banks, IT Services & Consulting, Oil & Gas – Refining & Marketing, Construction & Engineering, Home Financing, among 24 other sectors.
Advantages of investing in large cap mutual funds
For an investor, there are endless avenues to invest in the stock market – debt mutual funds, flexi cap funds, etc. But if you’re looking to secure your financial future, look no further than large cap mutual funds. Here are some reasons why investing in large cap mutual funds can be of benefit to you as an investor –
- Invest in large cap stocks with minimal amounts. An investor can invest in large cap mutual funds with as little as Rs. 100.
- Enjoy consistent returns as large cap funds invest in market leaders that are not heavily impacted by market movements. Your investment could still be generating returns even during economic downturns.
- Achieve long-term financial goals by investing in large cap funds, as they provide considerable capital appreciation over a period of 5-7 years or more. This is the perfect investment for those planning retirements or other long-term goals.
- Receive regular dividends from some large cap funds, which could double as passive income.
- Diversify your investment portfolio by investing in large cap funds in leading companies across sectors. This can help spread your risk and potentially lead to higher returns.
Unknown risks involved with large cap mutual funds
Before you invest in large cap mutual funds, it’s essential to understand the risks involved. While these funds can offer excellent long-term returns, there are a few things you should keep in mind:
- Even the best bluechip mutual funds come with certain risks, more so because they are a class of equity. You could lose money if the markets underperform substantially, which is known as market risk. This risk cannot be eliminated entirely, but it can be managed by diversifying your portfolio and investing for the long term.
- Large cap funds that invest predominantly in stocks of a specific sector are particularly vulnerable to concentration risk. This is the risk that the fund may incur massive losses when the sector underperforms. It’s important to ensure that your portfolio is diversified across sectors to minimize this risk.
- While large cap funds offer many advantages, they may provide moderate returns compared to mid and small cap funds. This means that you may need to invest more to achieve the same returns as a mid cap or small cap fund.
Don’t let these risks discourage you from investing in large cap mutual funds. On the contrary, they can be an excellent addition to your investment portfolio with careful research and proper risk management. Just be sure to consider these risks before making your investment decisions.
How to choose a large cap fund for your financial goal?
Consider the following factors when choosing the large cap fund suitable for your financial goal:
– Ensure the fund’s objective matches your investment needs and goals, such as diversification of investment across different sectors or consistent returns YoY.
– Look at the historical mutual fund returns. While past performance is no guarantee for future returns, analysing a fund’s historical returns across bull and bear cycles gives meaningful insights into the fund’s performance.
– Compare the mutual fund returns with that of the category average to identify underperforming or overperforming schemes
– Read about the fund manager and their qualification and experience. Analyse their past performance across various market cycles.
– Compare the fund’s expense ratio with that of the peers. The lower the expense ratio, the higher the returns. However, investing in a fund with a low expense ratio while not analysing other important factors can harm your returns.
Now that you’ve identified the best large cap mutual fund to meet your financial needs, there’s another element to consider –
Taxation of large cap funds
Since equity is the underlying asset of large cap funds, they are taxed like an equity fund. Therefore, the dividends offered by large cap funds are added to your overall income and taxed as per your applicable income tax slab.
The short-term capital gains on redeeming large-cap funds attract a tax of 15% regardless of your income tax slab. Further, long-term capital gains of up to Rs. 1 lakh are exempt from tax. However, gains exceeding the limit attract a tax of 10% without any indexation benefit. Read about the taxation of mutual funds in detail here.
Who should invest in large cap mutual funds?
Due to their stable nature, large cap funds are less vulnerable to market volatility and suitable for risk-averse investors. However, this doesn’t mean other investors shouldn’t invest in this fund. Large cap funds are good to have in your investment portfolio regardless of risk tolerance as they help diversify. Investors with a long-term horizon can also consider these funds.
Frequently asked questions (FAQs)
Do large cap funds pay dividends?
Yes, since large cap funds invest in equity, they offer a dividend payout plan. Be sure to check with your distributor or the Asset Management Company’s website for such variants.
How long should I stay invested in a large cap mutual fund?
Equities are known to generate better returns in the long term. Therefore, staying invested for at least 5-7 yrs in a large-cap fund makes sense.
Which is the best large cap fund based on a 3-yr CAGR?
Nippon India Large Cap Fund outperformed every scheme and generated an impressive 3-yr CAGR of 31.83%.
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