What Are Large-Cap Mutual Funds? 10 Top Large-Cap Funds to Invest in 2022

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Introduction

Interested in investing your hard-earned money and beating inflation? People invest in mutual funds because they do not know how to invest in the stock market by themselves. Mutual funds help them get the benefits of investing without having specialized financial knowledge. This is because mutual funds are managed by expert fund managers who invest their money in certain stocks that are more likely to give higher returns.

In India, around Rs. 38,56,140 crores of assets are managed by mutual funds as of 2022. Beginners are often confused about large-cap mutual funds, small-cap and mid-cap funds. Let’s first understand what large-cap mutual funds are.

What Are Large-Cap Mutual Funds?

Based on the market capitalisation of companies, they are categorized into three segments:

Small-cap companies: have a low market capitalisation (less than Rs. 5,000 crores)
Mid-cap companies:have moderate market capitalisation (between Rs. 5,000 crores and Rs. 20,000 crores)
Large-cap companies:have a large market capitalisation (more than Rs. 20,000 crores)

(Market capitalisation refers to the value of the total number of outstanding shares of a company at the current trading market price.) Now, what does that have to do with mutual funds? They are also divided into three segments: small-cap, mid-cap, and large-cap.

Large-cap mutual funds invest a hefty sum of investors’ money in large-cap companies. The best large-cap mutual funds to invest in 2022 are go-to investments with enormous benefits you should avail of. Stocks of small-cap companies are highly volatile and risky, yet they have the highest potential for growth among all three types of stocks. Whereas large-cap companies are much less volatile and, consequently, have a lower growth potential than small-cap or mid-cap stocks. However, they tend to give stable returns and are ideal for people who want to invest conservatively.

Advantages of Investing in the Best Large-Cap Mutual Funds in 2022

Large-cap mutual funds are more beneficial than mid-cap and small-cap mutual funds because they offer stability to investors by investing in robust large-cap companies that have low volatility and high liquidity. Professionals manage mutual funds by investing people’s money in many companies. They manage the risk and reward ratios and apply many strategies. Large-cap funds provide compounded income with dividends from investing in large-cap companies.

10 Top Large-Cap Mutual Funds

Selecting the right mutual fund scheme for yourself based on your financial strategy is a simpler task than choosing which stocks to invest in. Knowing about a few parameters of mutual funds like assets under management (AUM), expense ratio, and compound annual growth rate (CAGR) will help you choose the most suitable mutual fund scheme for yourself.

A mutual fund with a large AUM indicates greater interest from investors, whereas a mutual fund with a small AUM indicates that people are not participating in it.
A good five-year CAGR may be between 15% and 25%. You can use this metric to compare returns from various investments.
An expense ratio is a yearly cost paid to the fund manager of the mutual fund. For investors, a good expense ratio is considered to be between 0.5% and 0.75%. An expense ratio higher than 1.5% is not preferred.

Let’s take a look at a few of the best large-cap mutual funds to invest in 2022:

1. Axis Bluechip Fund

Offered by Axis Mutual Funds, its AUM is around Rs. 36,976.68 crores. The fund has an expense ratio of 0.55% with a five-year CAGR of 14.85%.

2. Kotak Bluechip Fund

Kotak Mahindra Asset Management Company Limited is a subsidiary of Kotak Mahindra Bank Limited. It has an AUM of Rs. 2,71,541.90 crores. The Kotak Blue Chip fund has an expense ratio of 0.68% and has provided 12.67% CAGR in the last five years.

4. UTI Mastershare Fund

UTI Mastershare is a large-cap fund with an AUM of Rs. 10,394 crores. The expense ratio of the UTI Mastershare Fund is 1.03% and has provided a CAGR of 12.57% in 5 years and 16.73% in 3 years.

5. Nippon India Large-Cap Fund

It has an AUM of Rs. 11,951 crores, including a 1.0% expense ratio with a CAGR of 12.49% in 5 years and 17.10% in 3 years.

7. Baroda BNP Paribas Large-Cap Fund

It has had a compound annual growth rate of 12.38% in the last five years. The large-cap fund has an expense ratio of 0.95% with an AUM of Rs. 1,326.75 crores.

6. Edelweiss Large-Cap Fund

The large-cap fund of Edelweiss Asset Management Limited has provided a CAGR of 12.42% in the last five years. It has an asset under management of Rs. 354.37 crores with an expense ratio of 0.93%.

7. Mirae Asset Large-CapFund

The CAGR of Mirae Asset fund in the last five years is 12.03%, with an expense ratio of 0.50%. The fund has an AUM of Rs. 32,981 crores.

8. Canara Robeco Bluechip Equity Fund

Canara Robeco Bluechip Equity Fund is one of the top large-cap mutual funds with an AUM of Rs. 7,988 crores. It has an expense ratio of 0.38% with a CAGR of 14.43% in 5 years.

9. ICICI Prudential Bluechip Fund

This ICICI large-cap mutual fund has had a CAGR of 12.14% in the last five years and has an expense ratio of 1.05%. The fund has an AUM of Rs. 32,810 crores.

10. Invesco India Large-Cap Fund

Invesco India Large-Cap fund has an AUM of Rs. 717 crores. In the last five years, the fund has provided a CAGR of 11.90% and an expense ratio of 0.90%.

Conclusion

Mutual funds are good investments for you as a beginner to investing. But you must choose the right one by comparing important metrics before investing. If you’re not happy about taking too many risks with your money, large-cap stocks mutual funds could be ideal for you. Check out more related content on Torus website. Happy investing!

Frequently Asked Questions

Q1. Why do people invest in large-cap mutual funds?

Many people prefer large-cap funds. This is because they lower the risk of investment loss.

Q2. How to select a reliable mutual fund?

Picking a safe mutual fund can be a hassle. Checking the historical data of the fund is one preferable way. However, there are tons of other things that should be considered before making any decision.