Best Large Cap Mutual Funds

Best Large Cap Funds to Invest in 2024: Benefits and Taxation

Investing in the stocks of the top companies, known as large cap stocks is not possible for every investor with the high pricing of only a single share. With large cap mutual funds, it’s no more difficult to add these stocks to your portfolio. There are a few best large cap funds that have generated great returns in the past and can be the ones to invest in right now. Curious to know more? Let’s understand what is large cap fund, its benefits, and the list of top 10 large cap mutual funds​.

What are Large Cap Mutual Funds?

Large cap funds are associated with the family of equity mutual funds. The main investing rule is that these funds have to put at least 80% of their collected corpus in large cap stocks. These stocks are well-established names in the market and they are ranked in 100 top companies based on the market capitalization. The market cap of these companies is around ₹20,000 crores or more.

The fund manager selects the top stocks and invests the collected money into these stocks. The 80% has to be invested in large cap stocks, while the rest depends on the fund manager’s choice.

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Top 10 Large Cap Mutual Funds for the Long Term

Here is the list of the best large cap mutual funds (Direct-Growth) that have given competitive returns in the last 5 years.

Large Cap Fund Name Benchmark Fund Size (in ₹ crores) 1 Year Returns (%) 5 Year Returns (%) Expense Ratio (%)
Fund Benchmark Fund Category Avg Fund
Nippon India Large Cap Fund BSE 100 TRI ₹34,105.04 29.42% 17.16% 20.24% 0.87% 0.67%
ICICI Prudential Bluechip Fund Nifty 100 TRI ₹63,669.82 28.24% 16.37% 19.47% 0.87% 0.87%
Invesco India Large cap Fund Nifty 100 TRI ₹1,255.06 31.69% 16.37% 19.11% 0.87% 0.72%
Canara Robeco Bluechip Equity Fund BSE 100 TRI ₹14,580.92 27.92% 17.16% 18.98% 0.87% 0.48%
JM Large Cap Fund BSE 100 TRI ₹456.66 30.08% 17.16% 18.84% 0.87% 0.66%
Baroda BNP Paribas Large Cap Fund Nifty 100 TRI ₹2,348.71 30.86% 16.37% 18.58% 0.87% 0.82%
Edelweiss Large Cap Fund Nifty 100 TRI ₹1,081.39 25.40% 16.37% 18.37% 0.87% 0.67%
Kotak Bluechip Fund Nifty 100 TRI ₹9,327.21 26.72% 16.37% 18.25% 0.87% 0.60%
Mahindra Manulife Large Cap Fund Nifty 100 TRI ₹576.81 25.15% 16.37% 17.32% 0.87% 0.67%
SBI Blue Chip Fund BSE 100 TRI ₹50,446.9 21.84% 17.16% 17.05% 0.87% 0.81%

*Data as on November 19, 2024

Overview of the 10 Best Large Cap Mutual Funds

These 10 best large cap mutual funds have delivered great returns and their expense ratio is also the lowest amongst their peers (as on November 19, 2024).

1. Nippon India Large Cap Fund

Nippon India Large Cap Fund NAV is ₹94.10. The minimum SIP amount is ₹100 while the lump sum investment is ₹100. The fund’s alpha is 6.28 and beta is 0.95. The top 3 stock allocations of this fund are HDFC Bank, ICICI Bank, and Reliance Industries.

By starting a monthly SIP of ₹1,000 for 5 years, your total investment of ₹60,000 in Nippon Large Cap Fund​ would grow to approx ₹1.04 lakhs.

2. ICICI Prudential Bluechip Fund

ICICI Prudential Bluechip Fund NAV is ₹112.94. The minimum SIP amount is ₹100 while the lump sum investment is ₹100. The fund’s alpha is 4.20 and beta is 0.88. The top 3 stock allocations of this fund are HDFC Bank, ICICI Bank, and Larsen & Toubro.

By starting a monthly SIP of ₹1,000 for 5 years, your total investment of ₹60,000 in ICICI Prudential Bluechip Fund would grow to approx ₹1.01 lakhs.

3. Invesco India Large cap Fund

Invesco India Large cap Fund NAV is ₹78.14. The minimum SIP amount is ₹100 while the lump sum investment is ₹1,000. The fund’s alpha is 1.29 and beta is 0.99. The top 3 stock allocations of this fund are HDFC Bank, ICICI Bank, and Housing Development Finance Corporation.

By starting a monthly SIP of ₹1,000 for 5 years, your total investment of ₹60,000 in Invesco India Large cap Fund would grow to approx ₹1 lakh.

4. Canara Robeco Bluechip Equity Fund

Canara Robeco Bluechip Equity Fund NAV is ₹68.09. The minimum SIP amount is ₹100 while the lump sum investment is ₹5,000. The fund’s alpha is 0.84 and beta is 0.90. The top 3 stock allocations of this fund are HDFC Bank, ICICI Bank, and Infosys.

By starting a monthly SIP of ₹1,000 for 5 years, your total investment of ₹60,000 in Canara Robeco Bluechip Equity Fund would grow to approx ₹1 lakh.

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5. JM Large Cap Fund

JM Large Cap Fund NAV is ₹172.84. The minimum SIP amount is ₹100 while the lump sum investment is ₹1,000. The fund’s alpha is 3.81 and beta is 0.93. The top 3 stock allocations of this fund are HDFC Bank, ICICI Bank, and Britannia Industries.

By starting a monthly SIP of ₹1,000 for 5 years, your total investment of ₹60,000 in JM Large Cap Fund would grow to approx ₹1 lakh.

6. Baroda BNP Paribas Large Cap Fund

Baroda BNP Paribas Large Cap Fund NAV is ₹244.28. The minimum SIP amount is ₹500 while the lump sum investment is ₹5,000. The fund’s alpha is 3.04 and beta is 0.93. The top allocations of this fund are debt instruments, HDFC Bank, and ICICI Bank.

By starting a monthly SIP of ₹1,000 for 5 years, your total investment of ₹60,000 in Baroda BNP Paribas Large Cap Fund would grow to more than ₹99,000.

7. Edelweiss Large Cap Fund

Edelweiss Large Cap Fund NAV is ₹91.22. The minimum SIP amount is ₹100 while the lump sum investment is ₹100. The fund’s alpha is 2.39 and beta is 0.94. The top 3 stock allocations of this fund are Housing Development Finance Corporation, ICICI Bank, and HDFC Bank.

By starting a monthly SIP of ₹1,000 for 5 years, your total investment of ₹60,000 in Edelweiss Large Cap Fund would grow to more than ₹98,000.

8. Kotak Bluechip Fund

Kotak Bluechip Fund NAV is ₹615.66. The minimum SIP amount is ₹100 while the lump sum investment is ₹100. The fund’s alpha is 0.89 and beta is 0.93. The top 3 stock allocations of this fund are Housing Development Finance Corporation, HDFC Bank, and ICICI Bank.

By starting a monthly SIP of ₹1,000 for 5 years, your total investment of ₹60,000 in Kotak Bluechip Fund would grow to approx ₹98,000.

9. Mahindra Manulife Large Cap Fund

Mahindra Manulife Large Cap Fund NAV is ₹24.11. The minimum SIP amount is ₹500 while the lump sum investment is ₹1,000. The fund’s alpha is 0.05 and beta is 0.95. The top 3 stock allocations of this fund are HDFC Bank, ICICI Bank, and Reliance Industries.

By starting a monthly SIP of ₹1,000 for 5 years, your total investment of ₹60,000 in Mahindra Manulife Large Cap Fund would grow to more than ₹95,000.

10. SBI Blue Chip Fund

SBI Blue Chip Fund NAV is ₹96.16. The minimum SIP amount is ₹500 while the lump sum investment is ₹5,000. The fund’s alpha is 0.63 and beta is 0.90. The top 3 stock allocations of this fund are HDFC Bank, ICICI Bank, and ITC.

By starting a monthly SIP of ₹1,000 for 5 years, your total investment of ₹60,000 in SBI Blue Chip Fund would grow to approx ₹95,000.

Pros of Large Cap Mutual Funds

1. Diversification with Expertise

The key benefit is that with a single unit of a fund, you get a bundle of top large cap stocks. This means the dual advantage of diversification along with professional expertise.

2. Alternative to Large Cap Stocks

Large cap funds are suitable for investors who want to invest in large cap stocks but don’t have a huge amount of money to buy the stocks. These funds comparatively have a lower cost and a small or retail investor can also invest in them.

3. Less Risky than Mid-Cap or Small-Cap Funds

The large cap companies have been in existence for a long time and hold the dominant position in the market. They have a strong business model and the ability to handle market downturns efficiently. Also, their strong financial position is highlighted in their ability to consistently generate good profits. Hence, these funds are less risky as compared to the funds that invest in mid-cap or small-cap stocks.

4. Good for Long Term Objectives

With the backing of stocks that can strongly stand in the long term and are less volatile, large cap funds are good to invest for long-term objectives such as a child’s education, retirement life, etc.

5. Regular Dividend Income

The large cap stocks also announce regular dividends for their shareholders. The large cap mutual funds which also have a part of ownership in these companies get a dividend income and this helps the funds to generate higher returns.

Cons of Large Cap Mutual Funds

The large cap funds invest in stocks that are already well-established and hence the chances of growth are very low. So, there are fewer possibilities that these funds can generate above-normal returns as compared to mid-cap or small-cap funds.

Tax on Income of Large Cap Mutual Funds

Earlier, the STCG of a fund with a holding period of more than 12 months was taxed at 15% and LTCG was taxed at 10%. With the amendment of Budget 2024, the STCG is taxed at 20% and LTCG at 12.5%. The exemption limit of the LTCG tax has also been raised from ₹1 lakh to ₹1.25 lakhs.

Conclusion

Large cap funds, the type of equity mutual funds, invest the majority of their assets in large cap stocks. Selecting the best large cap fund requires you to analyze past performance, expense ratio, and other ratios. There are multiple reasons for you to invest in these funds such as professional expertise, exposure to financially sound and strong companies, budget-friendly, and the suitability to invest for long-term objectives.

But while investing in any mutual fund, it is better to do your research and keep your investment objective in mind. Open Demat account with SMC Global Securities and keep investing in stocks, or mutual funds like a pro.

FAQs

1. Is Nippon India Large Cap a good fund?

Nippon Large Cap Fund is a good fund as it has generated 20.24% in the last 5 years by beating the benchmark returns. Its expense ratio is 0.67% which is lower than the category average.

2. Is Tata Large Cap Fund good or bad?

Tata Large Cap Fund has given 16.78% in the last 5 years but its expense ratio is 1.03% which is higher than the category average.

3. Is the UTI large cap fund good?

UTI Large Cap Fund has given 16.51% in the last 5 years but its expense ratio is 0.93% which is higher than the category average.

References:
https://www.smctradeonline.com/invest/mutual-funds
https://www.mutualfundssahihai.com/en/why-you-should-consider-investing-large-cap-funds

Author: All Content is verified by SMC Global Securities.

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