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Best Large-Cap Mutual Funds

Marisha Bhatt · 06 May 2025 · 6 mins read · 0 Comments
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Best Large-Cap Mutual Funds

Despite the multiple market swings and changes in taxation, mutual funds continue to remain one of the most popular investment options for the masses of India. However, given the turmoil that the stock markets are facing, most portfolios are in deep red. So what should you do? Redeem your mutual fund units? The answer is a big no! Investors should always focus on the long-term benefits of investing in mutual funds. Hence, one of the safest and most popular mutual fund categories is the large-cap funds. Check out this blog to know all about the large-cap funds and the top funds in this category. 

What are Large Cap Funds?

what-are-large-cap-mutual-funds

Large-cap funds are a category of equity mutual funds that invest mainly in shares of blue-chip and well-established companies. These companies are part of the top 100 listed companies on the stock exchange by market value, representing the financially strong companies with a good track record of performance. These companies are stable and less likely to face sudden ups and downs due to market fluctuations, and hence are considered safer compared to funds that invest in smaller or newer companies. These funds aim to give steady returns over the long term and are suitable for investors who want growth with relatively lower risk. Thus, they are an attractive choice of investment for beginners or investors looking for reliable investment options.

What are the Factors to Consider while Investing in Large-Cap Funds?

What are the Factors to Consider while Investing in Large-Cap Funds

Investment in large-cap funds is a safer investment choice as compared to investment in other aggressive funds like small-cap or mid-cap funds. However, some of the key factors to be considered while investing or selecting large-cap funds include,

Fund Performance Over Time

Investors should review the fund’s performance over the past few years. A strong large-cap fund generally shows steady and consistent growth across different market cycles. It is advisable not to rely solely on one year of high returns.

Expense Ratio

The expense ratio is the fee charged by the fund house for managing the investment. A lower expense ratio helps investors retain more of their returns. Comparing expense ratios among similar large-cap funds can help in making a cost-effective choice.

Investment Horizon

Large-cap funds are better suited for long-term investments. Investors with a time horizon of five years or more are likely to benefit more from the steady growth and compounding effect of these funds.

Risk and Return Balance

Although large-cap funds are relatively stable, they are still subject to market risks. Investors should assess their own risk tolerance and select a fund that provides a balanced mix of risk and return according to their comfort level.

Fund Manager’s Experience

The expertise and experience of the fund manager play a key role in the fund’s performance. A seasoned fund manager can make better decisions during market volatility. Investors should consider the manager’s past record and experience in handling large-cap funds.

What are the Features of Large-Cap Funds?

What are the Features of Large-Cap Funds

The top features of large-cap funds that make them attractive for investors include,

  • Investment in blue-chip stable companies.

  • Stable and reliable returns, even though they may be relatively lower as compared to mid-cap or small-cap funds. 

  • Lower risk of investment as compared to mid-cap or small-cap funds.

  • Good long-term investment when held for a long-term period of 5 years or more. 

  • Managed by professional fund managers. 

  • Higher liquidity, as units of large-cap funds can be easily redeemed as compared to small-cap funds.

  • Relatively more regular dividend payouts

  • Ideal for those who want equity exposure with relatively lower risk. 

What are the Benefits and Limitations of Investing in Large-Cap Funds?

Investment in large-cap funds is among the most favoured options for conservative investors with a lower risk appetite. However, before investing in large-cap funds, it is important to understand the benefits and limitations of this investment to ensure that it is aligned with the individual investment parameters. Here is a brief insight into a few pros and cons of investing in large-cap funds, enabling investors to make informed investment choices. 

Benefits of Investing in Large-Cap Funds

Benefits of Investing in Large-Cap Funds

  • Lower volatility - Large-cap funds are a relatively stable form of investment in mutual funds as they are less volatile in the face of market swings. 

  • Stability and Safety - Large-cap funds invest in big, trusted companies, making them more stable and less risky compared to small or mid-cap funds.

  • Good for Long-Term Goals - These funds are ideal for long-term investments like retirement, children’s education, or wealth building over 5+ years.

  • Diversification - Large-cap funds usually invest in a wide range of sectors (like banking, IT, FMCG, etc.), thereby reducing the risk tied to any one industry.

  • Steady Returns - These funds may not offer very high returns, but the returns are consistent with reliable growth over time, making them a favoured choice for investors looking for a stable alternate source of income.

Limitations of Investing in Large-Cap Funds

Limitations of Investing in Large-Cap Funds

  • Limited Growth Potential - Large companies grow slowly compared to smaller ones, so the scope for rapid profit is limited.

  • Not Ideal for Short-Term Gains - These funds are not usually subject to high volatility or market swings, hence, may not be suitable for those who want quick profits in a short time.

  • Less Flexible in Strategy - Large-cap funds must invest at least 80% in large-cap stocks as per SEBI rules, which limits the fund manager’s ability to explore high-growth opportunities in other segments.

  • Moderate Returns - The returns may be lower compared to mid and small-cap funds. Investors looking for very high returns might find these funds less attractive.

Top Large Cap Funds

Now that we have seen the key details of the large-cap funds, let us now focus on the top large-cap funds in terms of net assets.

ICICI Prudential Bluechip Fund Direct-Growth

The key details of the fund are,

icici-mutual-fund

 

Fund Manager

Mr. Vaibhav Dusad

Benchmark

NIFTY 100 TRI

Expense Ratio

0.89%

Risk

Low

Portfolio Aggregate

  • 82.28% Giant

  • 15.24% Large-Cap

  • 2.39% Mid-Cap

The trailing returns of the fund as of 10th April 2025 are,

icici-mutual-fund

 

6 Month

1 Year

3 Year

5 Year

10 Year

-9.50%

2.20%

14.36%

24.51%

13.32%

SBI Blue-Chip Direct Plan-Growth

The key details of the fund are,

sbi-blue-chip-direct-plan-growth

Fund Manager

Mr. SAurabh Pant

Benchmark

BSE 100 TRI

Expense Ratio

0.82%

Risk

Low

Portfolio Aggregate

  • 70.70% Giant

  • 19.77% Large-Cap

  • 9.53% Mid-Cap

 

The trailing returns of the fund as of 10th April 2025 are,

sbi-blue-chip-direct-plan-growth

6 Month

1 Year

3 Year

5 Year

10 Year

-10.75%

1.97%

10.88%

21.94%

11.84%

Nippon India Large Cap Fund Direct-Growth 

The key details of the fund are,

nippon-india-large-cap-fund-direct-growth 

Fund Manager

Mr. Sailesh Raj Bhan

Benchmark

BSE 100 TRI

Expense Ratio

0.71%

Risk

Below Average 

Portfolio Aggregate

  • 71.85% Giant

  • 18.07% Large-Cap

  • 9.84% Mid-Cap

 

The trailing returns of the fund as of 10th April 2025 are,

nippon-india-large-cap-fund-direct-growth 

6 Month

1 Year

3 Year

5 Year

10 Year

-10.46%

0.32%

16.12%

26.63%

13.29%

HDFC Large Cap Fund Direct-Growth 

The key details of the fund are,

hdfc-large-cap-fund-direct-growth

Fund Manager

Mr. Rahul Baijal

Benchmark

NIFTY 100 TRI

Expense Ratio

0.99%

Risk

Average

Portfolio Aggregate

  • 85.85% Giant

  • 12.87% Large-Cap

  • 1.29% Mid-Cap

 

The trailing returns of the fund as of 10th April 2025 are,

hdfc-large-cap-fund-direct-growth

6 Month

1 Year

3 Year

5 Year

10 Year

-11.25%

-0.87%

13.36%

23.86%

11.95%

Aditya Birla Sun Life Frontline Equity Direct Fund-Growth

The key details of the fund are,

Aditya Birla Sun Life Frontline Equity Direct Fund-Growth

Fund Manager

Mr. Mahesh Patil 

Benchmark

NIFTY 100 TRI

Expense Ratio

1.02%

Risk

Below Average

Portfolio Aggregate

  • 77.09% Giant

  • 12.98% Large-Cap

  • 9.22% Mid-Cap

 

The trailing returns of the fund as of 10th April 2025 are,

Aditya Birla Sun Life Frontline Equity Direct Fund-Growth

6 Month

1 Year

3 Year

5 Year

10 Year

-10.91%

2.86%

11.69%

22.47%

11.71%

Conclusion

Large-cap funds are one of the most popular categories of mutual fund with a huge investor base seeking stable returns with minimal risk. These funds, with the power of SIPs, make investment easier, more flexible and accessible for investors belonging to diverse classes, even though they may have limited market knowledge.

We hope this blog was able to shed valuable insights into investing in large-cap funds. Let us know if you need any further information on this topic, and watch this space for details on similar mutual fund categories.  

Till then, Happy Reading!


Read More: Why Invest in Equity Mutual Funds?

Large-cap funds are safer than mid-cap or small-cap funds because they invest in big, trusted companies. However, they still carry some market risk, so returns are subject to market fluctuations.

Large-cap funds invest in big, well-established companies that offer stable but moderate returns. Small-cap funds invest in smaller, growing companies that can give higher returns but come with higher risk and more ups and downs.

Large-cap funds may give lower returns compared to mid or small-cap funds, especially in a rising market. They also grow slowly and may not be suitable for investors looking for quick or high profits.

Large-cap funds are suitable for investors who want steady and safe growth over the long term with lower risk. They are a good choice for beginners, conservative investors, or anyone looking to invest for goals like retirement or children’s education.
Marisha Bhatt

Marisha Bhatt is a financial content writer @TrueData.

She writes with the sole aim of simplifying complex financial concepts and jargon while attempting to clarify technical and fundamental analysis concepts of the stock markets. The ultimate goal is to spread vital knowledge and benefit the maximum audience. Her Chartered Accountant background acts as the knowledge base to help clarify crucial concepts and create a sound investment portfolio.

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