Large cap funds are schemes that invest a significant portion of their corpus in companies with large market capitalization (in excess of Rs. 10000 crores). Among equity mutual funds, large cap funds are considered relatively safe enough to offer stable and sustainable returns over a long-term basis. They are ideal for investors who are thinking long-term but have conservative or moderately aggressive risk profile.
Here are the top 5 large cap mutual funds to invest in 2017
- Birla Sun Life Frontline Equity Fund – The fund was formed on August 30, 2002 and has delivered 7.10 percent, 16.78 percent and 18.53 percent return per annum in 1, 3, and 5 years period. The expense ratio is 2.10 percent. Since inception, the fund has delivered 21.86 percent return per annum. The fund has an AUM size of Rs. 13,848 crore.
Birla Sun Life Frontline Equity Fund has been close to unbeatable in the last ten years, beating both its benchmark and category average. In the past year, the fund has invested between 82 and 90 percent in large caps with a mid-cap allocation of 10 to 20 percent. The mid cap allocation is anywhere between 10 and 20 percent. Fund manager Mahesh Patil and the core management team is credited with a doing good job, steering the fund to substantial profits in bull markets as well as containing losses in the bear markets of 2008, 2001 and even 2015.
- SBI Bluechip Fund – This fund was launched on February 14, 2006 and has delivered 4.85 percent, 19.09 percent and 20.07 percent return per annum in one, three and five years respectively. Since inception, the fund has returned 10.59 percent return per annum. The fund has an AUM (Assets Under Management) size of Rs.9,735 crore. The expense ratio is 1.98 percent.
The fund invests up to 80 percent of its assets in large cap stocks and has a lee way to park around 20 percent in mid-caps. It is a growth-oriented fund that focuses on companies that are geared for optimum capital allocation. The fund did perform below expectations in the 2008 economic rises but since then, has pulled up its socks to emerge as a preferred large cap fund choice for many investors. In the last 5 years, SBI Bluechip Fund has done a commendable job, outpacing both benchmarks and category average by a huge margin. If you are looking for a consistent performer, choose SBI Bluechip. The fund manager is Sohini Andani, who has been associated with the fund since September 2010.
- Mirae Asset India Opportunities Fund – Launched in April 04, 2008, the fund has been a top notch performer since its inception. Over the period of 1, 3 and 5 years, the fund has given 7.72 percent, 20.25 percent and 20.09 percent return per annum. The expense ratio of the fund is 2.34 percent. The AUM size of the fund is Rs. 2,467 crore. Sine launch, the fund has delivered 15.39 percent returns per annum.
The investment strategy followed by fund manager Neelesh Surana is choosing quality business houses that deliver high return on capital. It steers clears of companies whose business fundamentals and management style is not up to the standards set by the fund. Usually, it invests 75 percent in large caps though the exposure can increase depending on what the fund management deems best for a particular market scenario. Since the past six years since its launch, the fund has beaten both the benchmark and the category average. The fund has not really been tested in varied bear phases like the one of 2008, but it did manage to contain the downside quite well, in 2011.
- Quantum Long Term Equity Fund – Formed on March 13, 2006, the fund has been an exceptional performer with 11.75 percent return in the past one year, 17.77 percent in 3 years and 18.30 percent in 5 years per annum. The AUM size is Rs.616 crore and the expense ratio is 1. 25 percent.
Fund managers Atul Kumar and Nitesh Shetty are known to keep the fund stuck to a value-based investing approach and avoid giving into momentum calls during market upswings or downsides. Typically, the fund has 92 to 95 percent exposure to large cap stocks, thus keeping the fund solidly stable. The low expense ratio (lowest among its peers) is also an added benefit.
- ICICI Prudential Focused Bluechip Equity Fund – The fund was formed on May 23, 2008 and has delivered 7.42 percent, 15.34 percent and 16.34 percent return per annum in the past 1, 3 and 5 years. Since launch, it has delivered 13.95 percent return per annum. The expense ratio is 2.17 percent. The fund manager is Manish Gunwani, who has been with the fund since 2012.
A relatively new large cap mutual fund among its peers, it has managed to cruise ahead of its benchmark and peers since its launch. The AUM size of the fund is Rs. 11,365 but that does not stop the fund from maintaining a clear focus on large caps. More than 90 percent of its corpus is vested in large caps with 5 to 10 percent in mid caps. Like Mirae Asset India Opportunities Fund, the ICICI Prudential Focused Bluechip Equity Fund did not get a chance to prove itself in the 2008 financial crisis but did a good job in containing downsides in the bear markets of 2011 and 2015.
Happy Wealth Creation in 2017!!