Top 5 Large Cap Mutual Funds

Below is the list of best performing Large cap mutual funds to invest in India.

Name of Fund 5 Year Returns (p.a.) Scheme Category
Axis Bluechip Fund 13.50% Large Cap
ICICI Prudential Bluechip Fund12.90% Large Cap
Mirae Asset Large Cap Fund13.76% Large Cap
SBI Bluechip Fund14.01% Large Cap
Kotak Bluechip Fund14.24% Large Cap
These funds invest minimum 80% of its assets in large/bluechip companies.These funds are less volatile as they invest in index heavyweights.

What are Large-Cap Funds?

Large-cap funds are mutual funds that invest in companies with large market capitalization. Large-cap companies are some of the most reputable and significant brands in our country and constitute the top 100 corporations in its segment. Reliable brand equity, strong corporate practices, competitive advantage, and well-established track record are some of the features that make these companies a viable option for investors looking for steady returns at low risk.

Examples of large-cap entities include – Ambuja Cement, HDFC Bank, Ashok Leyland, Wipro, DLF, and more.

Who should invest in Large-Cap Funds?

Capital returns from large-cap funds do not fluctuate according to the market conditions, which makes them a prudent choice for risk-averse investors. Furthermore, large-cap funds are financially secure and are invested in organizations that are less likely to become insolvent over time. Hence, it can be a perfect bet for investors aiming for long-term but a less-risky investment.

Also, since these funds ensure steady returns over at least 5 to 7 years, early-stage investors can use these funds to meet their retirement planning goals.

What points are to be considered before investing in Large-Cap Funds?

  • Investment horizon – Large-cap funds rely on the duration of your investment. People who wish to invest in such funds for a medium to long term (at least five to seven years) are more likely to witness huge returns over time.
  • Investment risks – Like other mutual funds, large-cap funds are also subject to various market risks. However, these risks tend to be in a moderate way. Unlike small-cap/mid-cap funds, the Net Asset Value (NAV) fluctuations are relatively less aggressive and small.
  • Expense Ratio – Large-cap funds charge a fee to manage the investor’s money called an expense ratio. Since these funds provide lower returns as compared to small-cap/mid-cap funds, a lower expense ratio with long investment horizon would help in generating higher returns in future.

Top 5 Balanced Funds

Below is the list of best performing balanced mutual funds to invest in India.

Name of Fund 5 Year Returns (p.a.) Scheme Category
HDFC Balanced Advantage Fund11.37%Dynamic Asset Allocation
ICICI Prudential Equity & Debt Fund12.78%Aggressive Hybrid Fund
DSP Regular Savings Fund9.22%Conservative Hybrid Fund
Axis Regular Saver Fund9.50%Conservative Hybrid Fund
These funds will give you the growth of equity with the cushion of debt. These funds invest in both equity and debt as per the defined asset allocation.

What do you understand by balanced funds?

The balanced funds are the funds that provide a combination of capital growth and moderate-income by investing in the balance of equities, bonds and debt securities.

As an asset class, equity and debt play an important role in creating long term wealth for an investor. Investment in equity brings an opportunity for capital growth through stock price appreciation and dividends, while debts portfolio provides stability through fixed income and capitals gains on bond prices.

What are the main benefits of investing into these funds?

There are various key benefits of investing in balanced funds:

  • Diversification - One of the main advantages of investing in a balanced fund is a mix of debt and equity investment. Diversification between equity and debt protects the portfolio from downside risks, if equity or debt enters a recession. While equity has the potential to deliver better long-term returns, the debt provides stability to the portfolio.
  • No manual rebalancing of asset allocation – In line with the investment goal, investors need to separate their equity and debt investments from time to time. However, this can be a tedious practice, besides it has implications for tax and cost (imbalance).

    Market sentiments are meant to drive asset allocation decisions, if done manually, which may not be in the best interests of investors. These challenges can be avoided by investing in a balanced fund as the fund manager is responsible for asset allocation and portfolio rebalancing and investors benefit from both equity and debt by investing in a fund.

  • Tax benefits – Most balanced funds carry at least 65% risk in equity, allowing them to be taxed like equity funds. These funds enjoy tax-free returns for a period of more than one year upto Rs.100,000 in a financial year. Also, above Rs.100,000 long term capital gain, the tax rate is 10% only.

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Investment in mutual funds or any asset class comes with an inherent risk. This is just a web-based tool for getting a rough estimate about the future value of your SIP/lump sum investments. The calculations are based on projected annual returns and periods. The actual annual returns may be higher or lower than the estimated value and it may have a significant impact on the final returns/goals.
So, you are requested to kindly do your own analysis or hire an expert financial advisor/planner before making any investment decision.

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