When it comes to mutual fund investments, large cap funds are often seen as the go-to option for stability. But that doesn’t mean they can’t deliver big profits too! While mid cap and small cap funds are often regarded as the best bets for high returns, the top large cap funds have shown that they can offer both strength and impressive returns. Some of the leading large cap funds have provided returns as high as 40% to 43% in the last year. Let’s break down how large cap funds work, why they can be a strong choice, and take a look at the top 5 large cap mutual funds that have outperformed the market.
Understanding Large Cap Mutual Funds: Why They Matter for Your Portfolio
Before diving into the top performers, it’s important to understand what large cap funds are and why they are such a key part of any equity mutual fund portfolio. Large cap funds invest in stocks of the 100 largest companies in the stock market based on market capitalization. These companies are usually financially strong, established, and have a proven track record of performance.
According to SEBI (Securities and Exchange Board of India), at least 80% of the portfolio in a large cap mutual fund must be invested in large cap stocks. Currently, the market cap of the 100th largest company in India is over Rs 84,000 crore, meaning the companies in large cap funds are huge and typically stable.
These funds are ideal for investors seeking stability and long-term growth. Since they invest in well-established companies, they tend to be less volatile compared to mid cap and small cap funds, though they still offer substantial growth potential.
Why Choose Large Cap Funds for Investment?
- Strength and Stability: Large cap funds focus on financially strong companies, which can weather market fluctuations. They provide stability to your portfolio while still offering growth potential.
- Lower Risk: While no equity investment is completely risk-free, large cap funds are considered less risky compared to mid cap and small cap funds. This makes them suitable for conservative investors looking for relatively safer equity investments.
- Good Long-Term Growth: Even though large cap funds may not always deliver the explosive returns seen in mid and small caps, top-performing large cap funds can still provide impressive profits over the long term.
- Diversification: By investing in large cap mutual funds, you are essentially putting your money into some of the biggest companies across various sectors, which diversifies your portfolio and spreads risk.
Top 5 Large Cap Mutual Funds Delivering 40% to 43% Returns in 1 Year
Here’s a look at the top-performing large cap funds that have provided excellent returns over the past year:
1. Quant Large Cap Fund
- Direct Plan 1-Year Return: 43.61%
- Regular Plan 1-Year Return: 41.44%
- Benchmark: NIFTY 100 Total Return Index (32.76%)
- Assets Under Management (AUM): Rs 2,314.71 crore
This fund stands out with its outstanding 43.61% return, making it the top performer in this category. It has outpaced its benchmark significantly, showing that large cap funds can still deliver robust returns.
2. JM Large Cap Fund
- Direct Plan 1-Year Return: 41.54%
- Regular Plan 1-Year Return: 39.89%
- Benchmark: BSE 100 Total Return Index (31.60%)
- AUM: Rs 411.15 crore
Another top performer, the JM Large Cap Fund, has delivered strong returns of over 41%. Despite having a relatively smaller AUM, this fund has managed to generate substantial returns for its investors.
3. Baroda BNP Paribas Large Cap Fund
- Direct Plan 1-Year Return: 41.27%
- Regular Plan 1-Year Return: 39.63%
- Benchmark: NIFTY 100 Total Return Index (32.76%)
- AUM: Rs 2,374.63 crore
The Baroda BNP Paribas Large Cap Fund has also performed well, with returns exceeding 41%, proving to be a solid option for large cap investors.
4. Bandhan Large Cap Fund
- Direct Plan 1-Year Return: 41.09%
- Regular Plan 1-Year Return: 39.41%
- Benchmark: BSE 100 Total Return Index (31.60%)
- AUM: Rs 1,720.16 crore
With a return of 41.09% in the last year, Bandhan Large Cap Fund has outperformed its benchmark by a wide margin. It continues to be a strong player in the large cap category.
5. Invesco India Largecap Fund
- Direct Plan 1-Year Return: 40.60%
- Regular Plan 1-Year Return: 38.67%
- Benchmark: NIFTY 100 Total Return Index (32.76%)
- AUM: Rs 1,264.38 crore
The Invesco India Largecap Fund is another great performer, giving over 40% returns in the past year. Its track record shows that even with a smaller AUM, largecap funds can deliver consistent and high returns.
Things to Consider Before Investing in Large Cap Funds
While large cap funds are generally seen as more stable and less risky compared to mid and smallcap funds, it’s essential to keep in mind that they are still equity investments. This means they come with their own set of risks, including market volatility.
- Market Risk: Even though large cap funds invest in big companies, they are still subject to market risks. Economic downturns or market corrections can impact the performance of these funds.
- High-Risk Category: Many large cap funds fall under the “very high risk” category according to their risk profile. This means that while they can provide good returns, there is still a possibility of losses, especially in the short term.
- Long-Term Investment: To truly benefit from investing in large cap mutual funds, it’s important to have a long-term investment horizon. These funds tend to deliver their best returns over several years.
- Past Performance Is Not a Guarantee: Just because a fund has performed well in the past does not mean it will continue to do so. Always consult with a financial advisor to assess your risk tolerance and investment goals before committing to any mutual fund investment.
