Best Large Cap Funds in India 2024: Top 10 Large Cap Mutual Funds to Invest
Large cap mutual funds are the type of equity funds, a category of mutual funds that usually invest in well-established, financially stable companies with a large market capitalisation. These funds are known for their focus on investing in blue chip companies. For many, top large cap mutual funds can be a good choice for investors seeking relatively lower risk and long-term growth prospects in the world of mutual fund investments. Let’s learn more about it.
What is Large Cap Mutual Fund?
Large Cap Mutual Fund is like a big basket where you can put your money for investment. But this basket is special because it holds shares of big, well-known companies. These companies are like the giants of the stock market.
Large cap equity funds make up the NIFTY 100 index, comprising the top 100 companies that excel in their respective industries and are often seen as less prone to risk. Additionally, large-cap stocks are considered the most reliable because they originate from well-established and renowned corporations.
Top 10 Large Cap Mutual Funds in India
To understand large cap mutual funds better, consider reviewing the best large cap mutual funds to invest in 2024.
| Largecap Fund Name | Fund Size (in Cr) | Expense Ratio (%) | Absolute Returns - 1Y (%) |
|---|---|---|---|
| Quant Large Cap Fund | 1,894.62 | 0.54 | 48.80 |
| JM Large Cap Fund | 233.53 | 1.01 | 48.50 |
| Baroda BNP Paribas Large Cap Fund | 2,284.71 | 0.85 | 46.57 |
| Bank of India Bluechip Fund | 187.92 | 1.26 | 44.96 |
| Invesco India Largecap Fund | 1,203.35 | 0.72 | 44.58 |
| Bandhan Large Cap Fund | 1,514.89 | 0.92 | 44.23 |
| Taurus Large Cap Fund | 52.04 | 2.51 | 43.91 |
| ICICI Pru Bluechip Fund | 62,717.11 | 0.87 | 43.22 |
| WOC Large Cap Fund | 568.3 | 0.67 | 42.68 |
| ITI Large Cap Fund | 357.3 | 0.47 | 42.35 |
Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.
Note: The data on the top 10 large cap funds in India in the list is from 2nd September 2024. However, for real-time updates on stock prices and market trends, visit the smallcase stocks collection today!
Overview of the Best Large Cap Funds in India
Quant Large Cap Fund
Quant Large Cap Fund, launched in January 1998, is one of the prominent names in the list of large cap mutual funds in India. It primarily invests in large-cap stocks, aiming to generate long-term capital appreciation. As a top large cap fund, it employs a diversified portfolio strategy, balancing growth and value stocks to enhance returns. With a fund size of Rs. 1,894.62 cr., and a low expense ratio of 0.54%, it ranks among the best large cap funds with a remarkable one-year absolute return of 48.80%.
JM Large Cap Fund
JM Large Cap Fund, launched in September 2006, is included in the large cap mutual funds list focusing on established companies with strong market positions. It aims for stable growth and long-term wealth creation, making it a contender in the rankings of top large cap mutual funds. The fund size stands at Rs. 233.53 cr., with an expense ratio of 1.01%, and it achieved a one-year absolute return of 48.50%, reflecting its potential as a top large cap mutual fund in the market.
Baroda BNP Paribas Large Cap Fund
Baroda BNP Paribas Large Cap Fund, established in February 2004, is recognized among the best large cap funds for investors seeking exposure to large cap index mutual funds in India. The fund invests predominantly in large-cap stocks with a blend of growth and value strategies. With a fund size of Rs. 2,284.71 cr., and an expense ratio of 0.85%, it ranks high among large cap mutual funds with a one-year absolute return of 46.57%, showcasing its strength in the large cap mutual fund returns landscape.
Bank of India Bluechip Fund
Bank of India Bluechip Fund, launched in January 2015, focuses on blue-chip large-cap stocks, making it a prominent choice in the best large cap index funds category. The fund aims to generate capital appreciation over the long term by investing in well-established companies with strong fundamentals. With a relatively smaller fund size of Rs. 187.92 cr., and an expense ratio of 1.26%, the fund delivered a one-year absolute return of 44.96%, positioning it among the top large cap mutual funds.
Invesco India Largecap Fund
Invesco India Largecap Fund, launched in August 2007, is a large cap mutual fund that seeks to provide long-term capital growth by investing predominantly in large-cap stocks. It is part of the top large cap funds due to its consistent performance and strategic stock selection. Managing assets worth Rs. 1,203.35 cr., the fund has an expense ratio of 0.72% and has delivered a strong one-year absolute return of 44.58%, placing it among the best large cap funds in India.
Bandhan Large Cap Fund
Bandhan Large Cap Fund, launched in March 2015, is one of the top large cap mutual funds with a focus on investing in large-cap companies to achieve long-term capital growth. The fund is notable in the large cap mutual funds ranking due to its disciplined investment approach. It manages Rs. 1,514.89 cr., in assets with an expense ratio of 0.92% and has delivered a one-year absolute return of 44.23%, making it a competitive choice among large cap mutual funds.
Taurus Large Cap Fund
Taurus Large Cap Fund, launched in August 2012, is a smaller player in the large cap mutual funds list but stands out for its high-risk, high-return approach. It focuses on large-cap stocks that are leaders in their industries. With a fund size of Rs. 52.04 cr., and a higher expense ratio of 2.51%, it has achieved a one-year absolute return of 43.91%, making it a unique option in the large cap mutual fund returns category.
ICICI Pru Bluechip Fund
ICICI Pru Bluechip Fund, one of the largest in the category of top large cap mutual funds, was launched in May 2008. Known for its robust investment strategy, it seeks to provide long-term capital appreciation by investing in blue-chip large-cap stocks. With an impressive fund size of Rs. 62,717.11 cr., and an expense ratio of 0.87%, it has consistently performed well, delivering a one-year absolute return of 43.22%, marking it as one of the best large cap index funds in India.
WOC Large Cap Fund
WOC Large Cap Fund, launched in April 2018, focuses on large-cap companies with strong financials and growth potential. It is a strong contender in the large cap mutual funds ranking due to its strategic approach to stock selection. The fund manages assets worth Rs. 568.30 cr., with an expense ratio of 0.67%, and has achieved a one-year absolute return of 42.68%, reflecting its performance among top large cap funds.
ITI Large Cap Fund
ITI Large Cap Fund, established in December 2019, aims to invest primarily in large-cap stocks to generate long-term capital appreciation. It is part of the best large cap index fund list, offering a low-cost option for investors. The fund size is Rs. 357.30 cr., with an expense ratio of 0.47%, making it one of the most cost-effective large cap funds. It delivered a one-year absolute return of 42.35%, positioning it favourably in the large cap mutual funds list.
Features of the Best Mutual Fund in Large Cap
Here are the features of the top mutual funds large cap.
- Lower Risk: Large cap mutual funds can be generally considered to be less risky than smaller companies, as they have a larger market presence and are more diversified.
- Steady Returns: Large-cap companies tend to grow at a slower pace than smaller companies, but they can generate more consistent earnings.
- Higher Liquidity: Best large cap MFs can be more liquid than smaller stocks, meaning that they can be more easily bought and sold.
- Portfolio Diversification: Large cap mutual funds typically invest in a diversified portfolio of stocks, which can help to reduce risk.
- Suitability for Long-term Investment: Best large cap MF can be best suited for long-term investors, as they tend to generate steadier returns over the long term.
How Do Large Cap Mutual Funds Work?
Large Cap funds primarily invest in India’s top 100 companies, determined by their market capitalisation. These companies include well-known brands like Reliance, Britannia, ITC, HUL, and others, and they enjoy a strong reputation in the market. Regulatory requirements dictate that large-cap funds allocate a minimum of 80% of their assets to these top 100 companies.
Opting for Large Cap funds provides the assurance that your investments are directed towards companies with a proven history of consistent performance over the medium to long term. As a result, large-cap funds tend to exhibit lower volatility compared to mid-cap and small-cap funds.
Factors to Consider Before Investing in Large Cap MFs
Before investing in large-cap mutual funds, it is important to consider the following factors:
- Your Investment Goals & Risk Appetite: Large-cap mutual funds are generally considered to be lower-risk investments than other types of equity funds, but they also tend to generate lower returns.
- Fund’s Performance History: It is important to look at the fund’s performance history over the long term (at least 5 years) to assess its consistency. You can also compare the fund’s performance to its benchmark index and other large-cap mutual funds.
- Fund’s Expense Ratio: The expense ratio is the annual fee that is charged to manage the fund. Lower expense ratios may lead to higher returns for investors.
- Fund’s Investment Strategy: Large-cap mutual funds can have different investment strategies. Some funds may focus on investing in value stocks, while others may focus on investing in growth stocks.
- Fund’s Track Record of the Fund Manager: The fund manager plays an important role in the performance of a mutual fund. It is important to look at the fund manager’s track record and experience to assess their ability to generate returns.
Who Should Invest in Large Cap Funds?
Large-cap mutual funds are generally suitable for the following types of investors:
- Long-term investors: Large-cap mutual funds are generally best suited for long-term investors (at least 5 years). This is because the stock market can be volatile in the short term, but large-cap companies tend to generate steadier returns over the long term.
- Risk-averse investors: Large-cap mutual funds are generally considered to be lower-risk investments than other types of equity funds, such as mid-cap and small-cap funds.
- Investors who need to access their money quickly: Large-cap stocks are more liquid than smaller stocks, meaning that they can be more easily bought and sold.
- Investors who are looking to build a core portfolio: Large-cap mutual funds can be a good way to build a core portfolio of equity investments. A core portfolio is a portfolio of low-cost, diversified investments that can help investors to achieve their long-term financial goals.
How to Select Good Large Cap Mutual Funds to Invest in?
When looking to invest in the best large-cap mutual funds, there are several factors you might consider when making an informed decision. Evaluating these aspects may help you align your investment with your financial goals.
1. Performance: You can look for large-cap mutual funds that have a consistent track record of outperforming their benchmark index and peers over a long-term period, typically at least 5 yrs. Analysing the historical performance can give you insights into how the fund has managed various market cycles.
2. Expense Ratio: Choosing funds with a lower expense ratio may be beneficial as it helps reduce the overall investment cost. A lower expense ratio means that a greater portion of the returns stays with you, potentially enhancing your long-term gains.
3. Investment Strategy: It is important to ensure that the fund’s investment strategy aligns with your own investment objectives and risk tolerance. Large-cap mutual funds generally invest in well-established companies, but you should consider whether the fund’s approach matches your financial goals.
4. Portfolio Concentration: You can evaluate the fund’s portfolio concentration to avoid funds that are overly invested in a few sectors or stocks. High concentration can increase risk, so diversifying across various sectors may help mitigate potential downsides.
How to Invest in the Best Large Cap Funds?
To invest in the best large cap funds, you can follow these steps:
- Open a Demat and Trading Account: This can be done with a stockbroker or online investment platform.
- Choose a Large Cap Mutual Fund: You can use a variety of resources to research large-cap mutual funds, such as financial websites, investment magazines, and mutual fund company websites.
- Invest in the Fund: You can invest in a large-cap mutual fund through a lump sum investment or through a systematic investment plan (SIP). A SIP is a way to invest a fixed amount of money in a mutual fund at regular intervals, such as monthly or quarterly.
- Monitor Your Investment: It is important to monitor your investment regularly to ensure that it is performing in line with your expectations. You should also rebalance your portfolio regularly to ensure that it remains aligned with your investment goals and risk tolerance.
How are Returns on Largecap Mutual Funds Calculated?
Returns on top-ranked Large Cap Mutual Funds are calculated using a simple method known as the Time-Weighted Rate of Return. This method takes into account the change in the Net Asset Value (NAV) of the fund over a specific period, along with any income generated by the fund during that time.
Formula for Time – Weighted Rate of Return = [(Ending Value + Income) / (Beginning Value + Investments – Redemptions)] – 1
Taxation on Large Cap Mutual Funds as per the Union Budget 2024-25
Large cap mutual funds are usually equity funds that are taxed accordingly. Being aware of these tax implications is essential for making informed financial decisions. The Union Budget for 2024-25 has made significant changes to the taxation on equity mutual funds. Here we have listed these changes, along with the revised tax rates for equity mutual funds:
Short-Term Capital Gains Tax
Any gains made when holding equity mutual funds for less than 12 months are considered short-term capital gains. The Union Budget 2024-25 increased the tax rate on these gains to 20%. The STCG tax rate was previously 15%.
Long-Term Capital Gains Tax
For equity mutual funds held for over a year, gains are classified as long-term capital gains. The new budget introduces these key changes:
- Tax-Free Limit: The capital gains up to Rs. 1.25 lakh per year are tax-free. This is an increase from the previous limit of Rs. 1 lakh.
- Tax Rate: The gains exceeding Rs. 1.25 lakh are now taxed at a flat rate of 12.5%. This is an increase from the previous rate of 10%.
- Indexation: The benefit of indexation, which allowed investors to adjust the purchase price for inflation, has been removed for all asset classes, including equity mutual funds.
Indexation was a method that allowed investors to adjust the purchase price of assets for inflation. This adjustment reduced taxable profits when selling assets like property or gold. Previously, these long-term capital gains were taxed at 20%. The new rule imposes a flat 12.5% tax on all long-term capital gains but eliminates any indexation benefits.
| Capital Gains Tax | Holding Period | Old Rate | New Rate |
| Short-Term Capital Gains (STCG) | Less than 12 months | 15% | 20% |
| Long-Term Capital Gains (LTCG) | More than 12 months | 10% | 12.50% |
Benefits of Investing in Large Cap Index Funds
There are several benefits to investing in large-cap index funds, including:
- Diversification: Large-cap index funds invest in a diversified basket of stocks, which helps to reduce your risk.
- Low Cost: Large-cap index funds typically have lower expense ratios than actively managed mutual funds. This means that you keep more of your investment returns in your pocket.
- Transparency: Large-cap index funds are transparent about their holdings and investment strategy.
- Tax Efficiency: Large-cap index funds are generally more tax-efficient than actively managed mutual funds.
Risks Involved While Investing in Large Cap Index Funds
Investing in Large Cap Index Funds can be a smart move, but like any financial journey, there can be some associated risks.
- Market Fluctuations: The stock market can be like a seesaw, going up and down. Investing in large-cap index funds means you can maybe experience some of these market swings.
- Economic Factors: The economy can affect large-cap companies. Maybe during an economic downturn, even the biggest giants can stumble. So, be prepared for these ups and downs.
- Concentration Risk: Large cap index funds can often be weighted towards a handful of the biggest companies. This concentration can make you vulnerable if those few companies face trouble.
- Limited Growth: Large cap companies are already well-established, which means their growth might be slower compared to smaller companies. So, you may not see rapid returns.
- Inflation: Inflation can eat into your real returns over time. Large cap index funds may not always outpace inflation, potentially affecting your purchasing power.
To Wrap It Up…
In conclusion, investing in Large Cap Index Funds can be a smart move for those who seek a steady and reliable path to wealth growth. So, whether you’re new to investing or a seasoned pro, you can perhaps find a place for Large Cap Index Funds in your portfolio. Remember, while they may not be the flashiest option, they bring a reliable, long-term approach to your investment journey.
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Frequently Asked Questions (FAQs) on Large Cap Funds –
Large cap funds are generally considered to be good investments for 3 years or more. However, it is important to note that all investments carry some risk, and there is no guarantee that large cap funds will generate positive returns over any given period of time.
Yes, large cap funds can be a good option for new investors. This is because they are relatively low-risk and offer the potential for good returns over the long term.
Returns on large cap mutual funds vary depending on the fund and the market conditions. For example, the Nifty 50 index has generated an average annual return of over 12% over the past 10 years.
As per the general understanding, it is advisable to stay invested for more than seven years, to potentially expect 10-12% returns.
Investing and adding the two best large cap mutual funds is not mandatory. However, one must consider their risk appetite and investment goals before investing.
You can invest in large-cap mutual funds at any time. However, it is important to invest regularly over the long term to benefit from compounding returns.
Here is a list of top large cap mutual funds.
1. Quant Large Cap Fund
2. JM Large Cap Fund
3. Baroda BNP Paribas Large Cap Fund
4. Bank of India Bluechip Fund
5. Invesco India Largecap Fund
Note: The list is only meant for educational purposes and is not recommendatory.
