Best Large Cap Mutual Fund For 2021

Why Invest in Mutual Fund

A Mutual fund is a pool of money that is collected from a group of Investors and is Invested by an asset management company to achieve the common objectives of the investors.

It is a collective investment process where the asset management company will collect the fund from various investors and allocate the fund to a fund manager, A fund manager is a professional who is responsible to manage the funds as per risk and returns agreed by the investors.

Large-Cap Mutual Funds

Large Cap Mutual Funds are invested on the top 100 companies in terms of market capitalization, Large-cap companies are the companies that have established themself with a large market capitalization in the long run over the years with market capitalization more than Rs.20,000 crore. They show their steady growth in their business and be trustworthy from the perspective of a large community of investors.

Large Cap Mutual Funds are suitable for the investors who are looking to invest their money for at least 3-4 Years and expecting high returns. At the same time, these Investors are to bear moderate losses in their Investments.   

Features of Large cap mutual funds:

• Risk In large cap mutual funds:

Large-cap mutual funds are investing their funds in large-cap companies with strong fundamental and technical growth, even Large-cap mutual funds are subject to market risk, but it is moderate compare to Mid-cap and Small-cap mutual funds. The net asset value will not fluctuate aggressively due to market fluctuations and it gives stability to your portfolio, and the risk of the capital loss is less compared to Mid-cap and Small-cap mutual funds.

• Returns In large cap mutual funds:

Large-cap mutual funds provide you thelong-termand stable returns added to that Large-cap companies provide regular dividends to its investors. These can also withstand in the bear market condition anyway; this does not provide a high return in short term but returns from these funds will be less volatile.

• Cost or Expense ratio of the scheme:

Large-cap mutual funds charge you the fees for the investment management provided by the company that in general it is called the Expense ratio. SEBI has mandated the maximum limit of expense ratio is to be 2.50%. The Expense ratio will play a major role during the selection of scheme any scheme with a lower expense ratio will help to gain maximum profit. Since large-cap mutual funds provide low returns compare to Mid-cap and Small-cap mutual funds it is important to choose the scheme with less Expense ratio.

• Financial goal:

Large-cap mutual funds are well known for less risk and stable reward, usually investors choose this scheme for long term goals and we can also call it as retirement planning scheme of the mutual fund as compounding of returns takes time in Large-cap mutual funds to compare to Mid-cap and Small-cap mutual funds. Investors should have proper planning and it suggested to be in part of the Investment for long term goals. 

• Tax on gains:

Return on large-cap funds is subject to Dividend distribution tax and capital gain tax. Large Cap equity mutual funds that are held for more than 12 months, fall under a tax bracket of 10%. However, the gains up to ₹1 lakh are completely tax exempted. When they are invested for less than 1 year.

Dividend distribution tax (DDT)will be deducted 10% at the source when your scheme gains from the dividend from the company.

Capital gain taxthe capital gains earned by you for a holding period of up to one year = Short Term Capital Gain (STCG) which is taxed at 15%. The capital gains earned by you for a holding period of more than one year = Long Term Capital Gain (LTCG). LTCG up to Rs. 1 lakh is not taxable. Any LTCG above this amount is taxed at the rate of 10% without indexation benefits.

Advantages:

• Large-cap funds invest money in large-cap companies that are having steady growth and development in business with strong corporate governance practice.
• These investments perform well even in the bear market compared to Mid-cap and Short-cap mutual funds.
• Large-cap funds provide good returns in the long run and even it includes Mid-cap and Short-cap companies as part of the portfolio.
• The companies in the large-cap mutual fund’s portfolio are steady compounders and may pay the dividend on a regular basis.
• Large-cap mutual funds are managed by professional fund managers and research analysts which invest the total investment in many sectors this process minimizes the risk and increases the returns on investment.
• Large-cap mutual funds are investing in the companies which are having good liquidity over the investment.

Disadvantages:

• Large-cap mutual funds do not provide exceptional returns in the growing market as large-cap companies make steady movement in the market.
• Large-cap mutual funds provide Marginal growth as compared to small and Mid-cap funds.
• Large-cap mutual funds are not suitable for short term investors. 
• The probability of return is low as they are slowly moving funds in terms of growth.
• Large-cap mutual funds are managed by fund managers so there will be Less power of ownership to the investor.

Top 5 Large-cap mutual funds

Mirae Asset Large Cap Fund

Fund size (Cr)                           :           Rs. 13,064.85

1 Yr Return                               :           7.02% PA

3 Yrs CAGR** Returns            :           5.79% PA

5 Yrs CAGR** Returns            :           11.73% PA

7 Yrs CAGR** Returns            :           16.72% PA

NVA as on 11-Sep-2020         :           Rs. 56.02

Expense Ratio                          :           0.63

• Axis Blue Chip Fund:

Fund size (Cr)                          :           Rs. 5,745.63

1 Yr Return                              :           8.68% PA

3 Yrs CAGR** Returns            :           9.86% PA

5 Yrs CAGR** Returns           :           11.59% PA

7 Yrs CAGR** Returns            :           14.13% PA

NVA as on 11-Sep-2020          :           Rs .34.06

Expense Ratio                         :           0.51

• ICICI Prudential Bluechip Fund:

Fund size (Cr)                          :           Rs. 22,182.14

1 Yr Return                              :           3.58% PA

3 Yrs CAGR** Returns           :           3.88% PA

5 Yrs CAGR** Returns           :           9.08% PA

7 Yrs CAGR** Returns           :           12.62% PA

NVA as on 11-Sep-2020          :           Rs .44.06

Expense Ratio                         :           1.08

• SBI Bluechip Fund:

Fund size (Cr)                          :           Rs. 22,754.43

1 Yr Return                              :           2.77% PA

3 Yrs CAGR** Returns           :           2.47% PA

5 Yrs CAGR** Returns           :           7.83% PA

7 Yrs CAGR** Returns           :           13.93% PA

NVA as on 11-Sep-2020          :           Rs .41.56

Expense Ratio                         :           1.07

• Nippon India Large Cap Fund:

Fund size (Cr)                          :           Rs. 13170.35

1 Yr Return                              :           -3.56% PA

3 Yrs CAGR** Returns           :           1.38% PA

5 Yrs CAGR** Returns            :           7.11% PA

7 Yrs CAGR** Returns            :           13.31% PA

NVA as on 11-Sep-2020          :           Rs .32.96

Expense Ratio                         :           1.02

Disclaimer: All the above information is for education purposes only and the mutual fund’s companies shown are not be considered has recommendations has data might vary from actuals in a period of time. kindly read the scheme and policy-related documents carefully before investing in any mutual funds and visit official website for more information.