Thursday, February 23, 2023
HomeMutual FundTop 3 Large Cap Mutual Funds in 2023 – myMoneySage Blog

Top 3 Large Cap Mutual Funds in 2023 – myMoneySage Blog


In this article we will discuss about Large cap mutual funds and Top 3 Large Cap funds which most likely outperform their peers in 2023.most likely outperform their peers in 2023.

Click here to be a part of myMoneySage Elite an exclusive community to the elite and discerning who want to maximise their wealth by leveraging the power of unbiased advice.

Large cap mutual funds are relatively low risk equity mutual funds that invest at least 80% of the corpus in companies that rank top 100 in terms of market capitalisation which have the potential to offer good returns in the future with lower risk. These companies owing to their large capital are likely to pay off debt on time, withstand the market turmoil and have a good debt-to-equity ratio. They are big companies that generate income from various channels, such that there is not a total burnout due to the failure of one or more sources of revenue. Due to a proven record of large-cap funds regarding good management, timely distribution of dividends, and good balance sheet, they are more stable and hence are highly liquid.

First let’s look at the advantages of investing in large cap funds:

  1. Relatively low risk with stable returns in the long run.
  2. They offer diversification which is very important to cushion any economic shocks.
  3. Low upfront investment requirement.
  4. These funds are highly liquid.

Now, the cons:

  1. One of the major con is that these funds give relatively lower returns than the smallcap and midcap funds when the markets are on a bull run.
  2. Number of large cap companies in India currently is limited due to this there maybe concentration risk on some funds.
  3. Market risk is the possibility of the markets underperforming.

Factors to consider:

There are several factors to consider while selecting largecap mutual funds but today will mention few major ones, they are;

  1. Standard deviation.
  2. Sortino Ratio.
  3. Sharpe Ratio.
  4. Jensen’s Alpha.
  5. Treynor’s Ratio.
  6. Expense Ratio.

Also read: Here is how to get out of the rat race and achieve your financial goals

Top 3 Largecap funds:

1. Mirae Asset Large Cap Fund:

It is an open ended equity scheme predominantly investing across large cap stocks and the investment objective of the scheme is to provide investors an opportunity to tap the growth potential of large cap businesses, which are amongst the top 100 companies in India by market capitalisation. Its benchmark is Nifty 100 TRI.

The investment approach is centred around participating in high quality businesses up to a reasonable price and holding the same over an extended period. The scheme tries to identify companies which have sustainable competitive advantage – stocks which has strong pricing power and are sector leaders.

Fund manager:

  1. Gaurav Khandelwal since 18-Oct-2021.
  2. Gaurav Misra since 31-Jan-2019.

This fund has an AUM of Rs. 34,194 Cr and has given 16.06% CAGR return since its Inception. The minimum investment amount for this fund is Rs. 5000 and addition investment amount is Rs. 1000+.

There is no entry load for the fund but there is some exit load:

  1. For redemption / switch out of upto 10% of the initial investment amount (limit) purchased or switched in within 1 year from the date of allotment: NIL.
  2. If units redeemed or switched out are in excess of the limit within 1 year from the date of allotment: 1%.
  3. If units are redeemed or switched out on or after 1 year from the date of allotment: NIL

Returns:

Some Important Ratios:

Standard Deviation 16.50
Beta 0.96
Sharpe Ratio 0.54
Jensen‘s Alpha -0.86
Treynor’s Ratio 0.09
Expense Ratio 0.53%

Click here to be a part of myMoneySage Elite an exclusive community to the elite and discerning who want to maximise their wealth by leveraging the power of unbiased advice.

2. Canara Robeco Bluechip Equity Fund:

The primary investment objective of the scheme is to provide capital appreciation by predominantly investing in companies having a large market capitalization. However, there can be no assurance that the investment objective of the scheme will be realized. Its benchmark is Nifty 100 TRI.

Fund manager:

  1. Shridatta Bhandwaldar since 05-Jul-2016.
  2. Vishal Mishra since 01-Jun-2021.

This fund has an AUM of Rs. 8,666 Cr and has given 14.62% CAGR return since its Inception. The minimum investment amount for this fund is Rs. 5000 and addition investment amount is Rs. 1000+.

There is no entry load for the fund but there is some exit load:

  1. If units redeemed or switched out are in excess of the limit within 1 year from the date of allotment: 1%.
  2. If units are redeemed or switched out on or after 1 year from the date of allotment: NIL.

Returns:

Some Important Ratios:

Standard Deviation 15.90
Beta 0.92
Sharpe Ratio 0.45
Jensen’s Alpha -0.55
Treynor’s Ratio 0.1
Expense Ratio 0.42%

 Also read: Market Outlook Feb 2023

3. Axis Bluechip Fund:

It is an open ended equity scheme predominantly investing across large cap stocks and the investment objective is to achieve long term capital appreciation by investing in a diversified portfolio predominantly consisting of equity and equity related securities of Large Cap companies including derivatives. However, there can be no assurance that the investment objective of the Scheme will be achieved. Its benchmark is S&P BSE 100 – TRI.

The portfolios will be built utilising a bottom-up stock selection process, focusing on appreciation potential of individual stocks from a fundamental perspective. The AMC employs a fundamentals based research process to analyse the appreciation potential of each stock in its universe. The universe of stocks is carefully selected to include companies having robust business models and enjoying sustainable competitive advantages as compared to their competitors. The Fund will have the flexibility to invest across the market capitalization spectrum.

Fund manager:

  1. Anupam Tiwari, since 6 Oct-2016.

This fund has an AUM of Rs. 35,198 Cr and has given 14.35% CAGR return since its Inception. The minimum investment amount for this fund is Rs. 500 and addition investment amount is Rs. 100+.

There is no entry load for the fund but there is some exit load:

  1. For redemption / switch out of upto 10% of the initial investment amount (limit) purchased or switched in within 1 year from the date of allotment: NIL.
  2. If units redeemed or switched out are in excess of the limit within 1 year from the date of allotment: 1%.
  3. If units are redeemed or switched out on or after 1 year from the date of allotment: NIL

This scheme is suitable for investors looking for:

  1. Long term capital growth (Atleast 5 years and above).
  2. Investment in a diversified portfolio predominantly consisting of equity and equity related instruments of large cap companies.

Returns:

Some Important Ratios:

Standard Deviation 15.27
Beta 0.85
Sharpe Ratio 0.22
Jensen‘s Alpha -4.74
Treynor’s Ratio 0.05
Expense Ratio 0.56%

Conclusion:

Large cap companies are considered to be one of the safest investments in equities since they give decent recent with a lot less volatility especially during extremely uncertain situations (Last few years for example). Large companies are well-established which means that they have more consistent Income due to them have been around for many years, having a stable workforce and an established product/service that generates revenue. Even though their returns are lower than mid and small cap funds, their stability as made them an attractive source of investment.

Finally, choosing the right large cap mutual fund is never easy as some funds tend to perform better than others during certain interval of time but along with the return expectations, one should also be cognisant of the risks associated to investing in such funds should be a priority. Broadly speaking large cap funds are suitable for investors with relatively lower risk appetite.

Disclaimer:

This article should not be construed as investment advice, please consult your Investment Adviser before making any investment decision.

If you are looking for a SEBI registered Investment Adviser visit mymoneysage.in

Also read: Top 3 Small Cap Mutual Funds to look at in 2023

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -
Google search engine

Most Popular

Recent Comments