Large Cap Mutual Funds invest in market leaders that have the ability to generate stable returns even amidst stock market chaos. Thus, this sub-category of equity mutual fund can ideally for part of the ‘Core’ portfolio of every investor.

We at PersonalFN have shortlisted the 4 best Large Cap Mutual Funds for 2024. But before we reveal our list of 4 best Large Cap Funds for 2024, let us get to know about the category in detail…

What are Large Cap Mutual Funds?

The Securities and Exchange Board of India (SEBI) defines Large Cap Mutual Fund as ‘an open-ended equity mutual fund investing a minimum 80% of its total assets in equity and equity-related instruments of large-cap companies’. The fund manager has the freedom to invest the remaining 20% corpus in stocks of mid and small cap companies, overseas equities, or debt instruments, or simply hold the balance 20% in cash to take care of liquidity and redemption needs.

Large-cap companies, also known as blue chip companies, are the top 100 companies in terms of market capitalisation. Large-cap companies generally have a market capitalisation of more than Rs 20,000 crore. Some of the most popular large cap companies include HDFC Bank, Reliance Industries, ICICI Bank, Infosys, ITC, etc.

Examples of Large Cap Mutual Funds in India

The securities quoted are for illustration only and are not recommendatory.
AUM data as of October 31, 2023
(Source: ACE MF, data collated by PersonalFN) 

How Large Cap Mutual Funds fared in 2023?

The Indian equity market continued to display optimistic trend in 2023 amid strong participation from Foreign Institutional Investors (FIIs) as well as domestic investors. Factors such as robust corporate earnings, resilient economic activities even in the face of a global slowdown, inflation coming off from its peak, and government’s capex push contributed to the rally in the market.

Though mid-cap and small-cap stocks dominated throughout the year, large-cap stocks were not far behind. Large cap indices such as S&P BSE Sensex and the Nifty 50 index scaled multiple peaks over the course of the year. The Nifty 50 touched a peak of 20,192 on September 15, 2023, while the Sensex too hit the lifetime high at 67,838.

Though the Nifty 50 and Sensex consolidated a bit after that due to weak global cues, on a year-to-date basis, the indices have generated reasonable returns of 8.8% and 7.9%, respectively (as of November 20, 2023), outpacing many of its global peers. As a result, Large Cap Funds too fared well during the year. In the last one year, Large Cap Funds generated absolute returns of 12.8% on an average.

How popular Large Cap Mutual Funds fared in 2023

Scheme Name 1 Year 3 Years 5 Years 7 Years 10 Years
Canara Rob Bluechip Equity Fund 11.97 16.70 16.93 16.68 15.69
Nippon India Large Cap Fund 19.97 25.66 16.09 16.40 17.71
ICICI Pru Bluechip Fund 16.11 20.91 15.85 15.69 16.05
SBI BlueChip Fund 12.77 18.15 15.28 14.36 16.37
HDFC Top 100 Fund 17.64 22.77 14.72 14.66 15.43
UTI Large Cap Fund 9.97 16.43 14.56 14.38 14.69
Mirae Asset Large Cap Fund 9.45 16.42 14.37 15.21 17.32
Aditya Birla SL Frontline Equity Fund 12.17 18.20 14.13 13.70 15.15
Franklin India Bluechip Fund 11.45 16.73 12.82 12.12 13.40
Category Average 12.82 17.40 14.56 14.37 14.80

Past performance is not an indicator for future returns. The securities quoted are for illustration only and are not recommendatory.
Data as of November 20, 2023. Direct plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN) 

Nifty Index Fund vs Active Large Cap Mutual Fund: Which is better?

Investors now have the option to choose from actively managed Large Cap Mutual Funds or passively managed funds such as Index Funds.

Passive funds provide a low-cost investment offering for investors looking to earn decent returns from equities by tracking the respective benchmark index and/or underlying fund. This makes passive funds ideal for new investors who have just started their investment journey or those who do not want to undertake relatively higher risk. It is also a simple and convenient option for investors who find it difficult to choose the right fund from the plethora of available active funds.

[Read: Index Funds vs Mutual Funds: Know the Difference]

But do note that a fund manager of a worthy well-diversified open-ended Large Cap Mutual Fund that follows robust investment processes and systems hold the potential to generate meaningful alpha over the benchmark. Unlike passive funds, actively managed funds are better poised to take advantage of dynamic market conditions and make tactical allocations in attractive-looking stocks/sectors/market cap, depending on the outlook. This enables actively managed schemes to limit downside risk.

So, if you are looking for opportunities to beat the benchmark index and potentially earn better real returns (also known as inflation-adjusted returns), an actively managed fund is certainly a better choice.

As an investor, you can consider investing in a mix of Nifty Index Funds and well-managed Large Cap Mutual Funds to create a diversified portfolio that will help you tide over volatile market conditions.


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

1) Investors can potentially benefit from the strength of well-established, financially sound, and trustworthy companies that are usually steady compounders of wealth;

2) Large Cap Funds offer better stability in terms of returns;

3) Large-cap stocks are highly liquid in the secondary market;

4) Large-cap stocks are well-researched and therefore abundant information is available for fund managers to make an informed decision;

5) During economic slowdown, Large Cap Funds tend to witness lower downside risk compared to Mid Cap Funds and Small Cap Funds;

6) Investors benefit from the steady growth of capital over the long run without exposing your portfolio to high risk;

7) Suitable for planning for long-term goals such as retirement, children’s education, and wealth creation, etc.;

8) Instead of buying individual stocks, investors can invest a small amount regularly via the Systematic Investment Plan (SIP) mode.

Favourite stocks of Large Cap Mutual Funds

The securities quoted are for illustration only and are not recommendatory.
AUM data as of October 31, 2023
(Source: ACE MF, data collated by PersonalFN) 

What are the risks involved in Large Cap Mutual Funds?

Since Large Cap Mutual Funds invest in equities, they are prone to market fluctuations. However, the risk involved is relatively lower compared to its peers in the Mid Cap Fund and Small Cap Fund category. Moreover, Large Cap Fund may not generate extraordinarily high returns because large-sized companies already hold significant market share and therefore, they tend to grow at a slower pace.

Who should invest in Large Cap Mutual Funds?

Large Cap Mutual Funds are suitable for investors looking for steady growth of capital over the long run through equities but do not want to assume very high risk. It is advisable to have a long-term investment horizon of at least 3-5 years when investing in Large Cap Funds.

How much to consider allocating in Large Cap Mutual Funds?

With significant exposure to market leaders, Large Cap Mutual Funds are less likely to be impacted by economic slowdown and market correction. Therefore, these funds can form part of the Core equity portfolio of every investor. However, the actual allocation in the portfolio will depend on various factors such as an individual’s financial goals, risk appetite, and investment horizon.

Conservative investors and investors with moderate risk appetite can consider holding higher allocation to Large Cap Funds (around 50-70% or more of their equity portfolio), and the balance can be in Mid-cap Funds, Value Funds, Flexi Cap Funds, etc.

On the other hand, aggressive investors can consider allocating 30-50% of their equity assets in Large Cap Funds.

Avoid investing in Large Cap Mutual Funds if you have a very short-term investment horizon of, say, 6 months, 1 year, or 2 years.

How are Large Cap Mutual Funds taxed?

Large Cap Mutual Funds are equity-oriented mutual funds and hence they follow equity taxation. The holding period for large cap mutual funds from a tax perspective is 12 months. So, if you sell your large cap fund units before 12 months, the gains will be subject to short-term capital gains (STCG) tax of flat 15%.

On the other hand, if you sell your large cap fund units after completing one year, the gains will be subject to long-term capital gains (LTCG) tax of 10%, but only if the gains exceed Rs 1 Lakh in a financial year. If your long-term gains are below Rs 1 Lakh and you redeem after completing one year, then you do not have to pay any tax on these gains.

Which are the best Large Cap Mutual Funds for 2024?

With the basics of large cap funds done, let us now move on to the list of the best large cap funds to consider for investment in 2024. This list of best large cap funds for 2024 is a result of extreme scrutiny of over 30 Large Cap Mutual Funds in India on both qualitative and quantitative factors. These four best large cap funds have the calibre to generate consistently superior long-term returns whilst curbing the downside risks during market downturns.

List of Best Large Cap Mutual Funds for 2024

Scheme Name 1 Year 3 Years 5 Years 7 Years 10 Years SD Annualised Sharpe
ICICI Pru Bluechip Fund 16.11 20.91 15.85 15.69 16.05 13.52 0.34
HDFC Top 100 Fund 17.64 22.77 14.72 14.66 15.43 15.02 0.34
Nippon India Large Cap Fund 19.97 25.66 16.09 16.40 17.71 15.45 0.39
SBI BlueChip Fund 12.77 18.15 15.28 14.36 16.37 14.48 0.28
Category Average 12.82 17.40 14.56 14.37 14.80 14.09 0.24
S&P BSE 100 – TRI 10.36 17.73 14.65 15.10 14.23 14.56 0.26
NIFTY 100 – TRI 7.81 16.34 13.94 14.56 14.00 14.63 0.24

Past performance is not an indicator for future returns. The securities quoted are for illustration only and are not recommendatory.
Data as of November 20, 2023. Direct plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN) 

Let us take an in-depth look at each of these 4 best large cap mutual funds:

Best Large Cap Mutual Funds for 2024 #1: ICICI Pru Bluechip Fund

Launched in May 2008, ICICI Prudential Bluechip Fund has created a successful track record of generating stable returns over the long run. ICICI Prudential Bluechip Fund is currently the largest scheme in the Large Cap Fund category having an AUM of Rs 41,269 crore as of October 31, 2023. The fund focuses on investing in stocks from the universe of the top 100 companies listed on the NSE in which the fund manager has high conviction.

Fund Snapshot – ICICI Pru Bluechip Fund

Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Portfolio data as of October 31, 2023
Returns and NAV data as of November 20, 2023. Regular Plan – Growth Option considered
(Source: ACE MF, data collated by PersonalFN) 

In the last 5 years, ICICI Prudential Bluechip Fund has generated returns at a CAGR of 15.9%. The fund focuses on identifying high growth potential stocks available at reasonable valuations. With this strategy, I ICICI Prudential Bluechip Fund has displayed its ability to limit the downside risk for its investors during uncertain and highly volatile market conditions, while it has also rewarded them with above-average returns during market rallies. The fund typically follows a buy-and-hold strategy and aims to hold a well-diversified portfolio without any sector bias.

Click here to read PersonalFN’s analysis on ICICI Pru Bluechip Fund.

Best Large Cap Mutual Funds for 2024 #2: HDFC Top 100 Fund

HDFC Top 100 Fund, the erstwhile HDFC Top 200 Fund, is a well-known scheme in the Large Cap Fund category. Launched way back in September 1996, it has an established track record of over 25 years to its credit and has generated returns at a CAGR of around 18.8% since inception. HDFC Top 100 Fund witnessed a rough phase in 2015 and then between 2019 and 2020 due to higher exposure to certain stocks and themes such as Consumption and PSU stocks, that ran out of favour during this period. Nonetheless, the scheme displayed a turnaround growth as these stocks outshined from the latter half of 2020.

Fund Snapshot – HDFC Top 100 Fund

Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Portfolio data as of October 31, 2023
Returns and NAV data as of November 20, 2023. Regular Plan – Growth Option considered
(Source: ACE MF, data collated by PersonalFN) 

In the last 5 years, HDFC Top 100 Fund delivered a CAGR of 14.7%. The fund follows a blend of growth and value investment to deliver optimal returns at a reasonable risk level. While creating the portfolio, the fund manager adopts the bottom-up approach to pick stocks and blends it with the top-down approach to analyse macro trends. The fund has high conviction in most of its stocks and holds them with a long-term view, even if it leads to underperformance in the short run.

Click here to read PersonalFN’s analysis on HDFC Top 100 Fund.

Best Large Cap Mutual Funds for 2024 #3: Nippon India Large Cap Fund

Launched in August 2007, Nippon India Large Cap Fund was originally launched as a large & mid-cap fund that invested predominantly in the top 200 companies. The fund was recategorised as a Large Cap Fund in 2018 to align with SEBI’s norms. Under its previous mandate too, Nippon India Large Cap Fund used to maintain a large-cap biased portfolio (investing around 75-80% of its assets in the segment) along with a significant exposure to mid-cap stocks.

Fund Snapshot – Nippon India Large Cap Fund

Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Portfolio data as of October 31, 2023
Returns and NAV data as of November 20, 2023. Regular Plan – Growth Option considered
(Source: ACE MF, data collated by PersonalFN) 

After a witnessing a lean phase between 2019 and 2020, the fund gained immensely in the last couple of years. It has generated returns at a CAGR of 16.1% in the last 5 years. Nippon India Large Cap Fund aims to own dominant businesses at reasonable valuations to reduce the risks and generate alpha. While picking stocks, the fund focuses on criteria such as sound management, good track record of the company, potential for future growth, and industry economic scenario.

Click here to read PersonalFN’s analysis on Nippon India Large Cap Fund.

Best Large Cap Mutual Funds for 2024 #4: SBI Bluechip Fund

Launched in February 2006, SBI Bluechip Fund is a popular scheme in the Large Cap Fund category with an AUM of over Rs 38,598 crore. The fund’s bias towards quality large-cap stocks, along with strategic allocation to mid-caps, has enabled it to record reasonable risk-adjusted returns for its investors. SBI Bluechip Fund prefers to stay away from momentum-driven bets, and focuses on picking fundamentally sound stocks.

Fund Snapshot – SBI Bluechip Fund

Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Portfolio data as of October 31, 2023
Returns and NAV data as of November 20, 2023. Regular Plan – Growth Option considered
(Source: ACE MF, data collated by PersonalFN) 

While SBI Bluechip Fund has shown a mixed trend in terms of outperformance and underperformance over different market phases in the past, the fund has managed to generate satisfactory returns over the long run. In the last 5 years, SBI Bluechip Fund registered a growth at a CAGR of 15.3%. The fund follows a blend of growth and value style of investing and adopts a combination of bottom-up and top-down approach to pick stocks across sectors. Belonging to a process-driven fund house, SBI Bluechip Fund lays high emphasis on risk management that helps it tide over stressful market conditions and also do well during bull phases.

Click here to read PersonalFN’s analysis on SBI Bluechip Fund.

Note: This write-up is for information purpose and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. Mutual Fund Investments are subject to market risks, read all scheme-related documents carefully before investing.

This article first appeared on PersonalFN here


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