Large Cap Mutual Funds

One of the major reasons why we invest is to grow our wealth so that we can afford that dream vacation, our child’s education, buying a house, etc. When it comes to growing or creating wealth, mutual funds seem to be the best investment tool around which is why there has been a rise in the number of investors putting their money in them.

If you are one of those who is interested to invest in mutual funds and has been researching on the subject, chances are that you have come across the words - large cap, mid cap, and small cap mutual funds. We shall tell you what these funds are but will focus primarily on the large cap mutual funds.

What are Large Cap mutual funds?

In India, mutual funds have been categorised on the basis of market capitalisation by the Securities and Exchange Board of India (SEBI) which is the regulator of capital markets. The word ‘cap’ refers to ‘capitalisation’ and the categorisation is as follows:

  1. Large Cap mutual fund - Schemes that invest in stocks of firms that are ranked 1 to 100 based on full market capitalisation. These funds are the least volatile.
  2. Mid Cap mutual fund - Schemes that invest in stocks of firms that are ranked 101 to 250 based on full market capitalisation. These funds have a higher volatility when compared with large cap funds.
  3. Small Cap mutual fund - Schemes that invest in stocks of firms that are ranked 251 and above based on full market capitalisation. These funds are the most volatile but at the same time have the potential to deliver high returns.

Since large cap mutual funds invest in stocks of large cap firms, they are less risky compared to mid and small cap firms. This is because large cap firms are trustworthy, have strong corporate governance practices, are reputable, and have a proven track record. Hence, over the long term, stocks of these firms are known to deliver better returns. Large cap mutual funds are ideal for investors with a low-risk appetite and who seek capital appreciation over a long term.

What are the benefits of investing in Large Cap Mutual Funds?

  • Large cap funds offer steady returns as they invest in firms that are stable and are top performers in their respective industries.
  • In times of high market volatility, these funds are less likely to be impacted and hence, it is safe to invest in these funds.
  • Large cap funds have the ability to pay regular dividends to its investors thereby offering regular income.

Top performing Large Cap mutual funds

The top 10 large cap mutual funds which have delivered good returns over the years have been given below:

Name of the Scheme NAV 1-Year Return (%) 3-Years Return (%)
JM Core 11 - Direct - Growth 8.7656 -5.52 15.46
JM Core 11 - Growth 8.1976 -6.36 13.98
Reliance Large Cap - Direct - Growth 34.1882 0.89 12.84
ICICI Pru Nifty Next 50 Index - Direct - Growth 24.7265 -8.14 12.67
ICICI Prudential Bluechip Fund - Direct - Growth 41.6700 0.07 12.60
ICICI Pru Bluechip Inst I - Growth 43.4400 0.07 12.60
Axis Bluechip - Direct - Growth 27.7400 6.77 12.55
ICICI Pru Value Series 5 - Direct - Growth 15.4700 -0.32 12.52
IDBI Nifty Junior Index - Direct - Growth 21.6268 -8.28 12.45
Canara Robeco Bluechip Equity Fund - Direct - Growth 24.0300 3.58 11.76

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