Top Large Cap Mutual Funds to Invest in September 2024
Large-cap mutual funds are the most recommended by many mutual fund experts for the coming year. It comes under the category of equity asset class and is safer to the conservative investor as the large-cap funds invest in the top 100 companies on market capitalization. Large-cap companies show less effect during the fall of the market. Hence, these funds turn out to be very fruitful at a time when the market has become expensive and turns unpredictable.
Why Opt for Large Cap Mutual Funds?
SEBI mandates that large-cap mutual funds invest in the biggest and most stable companies which usually perform well in volatile markets. With the market continuing to go upwards, the spectre of volatility, high interest rates and inflation becomes more palpable. Though broadly the Indian economy is stable, risks are there due to global uncertainties. And that’s perhaps why advisors caution investors and tell them to use large-cap funds to take up a relatively safer bet.
Large Cap Funds: Opportunities and Challenges
Although large-cap funds seem to be losing their edge, it is a little too early to write them off. In fact, since the introduction of the total return index in 2018 and the new, stricter investment norms, these funds have struggled to outperform their benchmarks. However, large-cap funds may continue to deliver returns above the rate of inflation with lesser volatility. For investors whose return expectations are around 10-12% over the long run, large-cap funds will remain a good bet.
Recommended Large Cap Funds September 2024
Large-cap fund investors may consider the following schemes with at least a five to seven-year time horizon:
1. Baroda BNP Paribas Large Cap Fund: This scheme has been one of the most consistent large-cap funds in the last seven months, as it always remains in the first quartile. The scheme opens up a portfolio comprising the cream of large-cap companies for the investors. Baroda BNP Paribas Mutual Fund managed the fund that invests in well-established companies that have a good track record of performance. The scheme will adopt a top-down approach to identify companies that have strong growth prospects and enjoy competitive advantages. With its portfolio comprising a diversified set of large-cap equity, the investment objective of Baroda BNP Paribas Large Cap Fund is to ensure relatively stable capital appreciation over the long term. Thus, it will act as an apt mutual fund scheme for conservative investors.
2. Axis Bluechip Fund: Though this fund has been in the fourth quartile in the last six months, its long-term performance on a ten-year scale is really very strong. This is one of the most popular large-cap mutual funds with an extremely good track record and consistency. From the house of Axis Mutual Fund, this large-cap fund basically invests in well-established large-cap companies that are financially strong and stable. It primarily invests in high-quality, growth-oriented equities. This scheme essentially aims at consistent return generation over a long period of time. Axis Bluechip Fund is well-diversified across sectors and, therefore, suitable for those investors for whom the stability of their equity investment is paramount, with calculated moderate risks.
3. Canara Robeco Bluechip Equity Fund: The fund has stayed in the third quartile for the last seven months, which indicates average performance. It is a large-cap fund and mainly invests in top blue-chip companies. Canara Robeco Mutual Fund managed the fund with the investment objective of long-term capital appreciation by investing predominantly in financially strong and well-established blue-chip companies that have a leadership position in the market. The fund follows a disciplined approach whereby both growth and value stocks are bought to maximize returns while keeping the risks under check. It has, therefore, proved to be a very reliable option for investors seeking regular returns from a portfolio of high-quality large-cap stocks.
4. Mirae Asset Large Cap Fund: Although the fund has continuously been in the fourth quartile for 11 months, its diversified portfolio makes it worth consideration. It is noted for strong large-cap companies that possess robust fundamentals. This scheme is managed by Mirae Asset Mutual Fund. It will invest in well-established companies that have a performance track record, thus giving the right mix of growth and stability. The fund will follow a diligent stock-picking strategy combined with sector allocation to ensure that the scheme outperforms the benchmark over a long period. Aiming to create long-term wealth by investing in leading companies in a sustainable manner with efficient risk management would be ideal for investors with a long-term horizon.
5. Edelweiss Large Cap Fund: Edelweiss Large Cap Fund is devised for those investors who wish to invest in large-cap equity for stable growth. This fund, maintained by Edelweiss Mutual Fund, basically invests in large companies of different sectors. The basic investment philosophy of the fund is to select only those high-quality companies that have strong fundamentals and can return consistently over a period of time. The fund seeks long-term capital growth along with relatively lower risk, thus positioning itself to provide a shielding force for conservative investors looking for regular returns.
Problems with Axis Bluechip Fund
A number of investors have written to us concerned about the recent underperformance of Axis Bluechip Fund. Though the fund has struggled in the last three years, its overall performance has been good, having beaten the benchmark and category in seven of the last ten years. If you are concerned about this recent trend, you could exit this scheme and shift to another large-cap fund. But if you can give it more time, this fund still stands a chance as markets change.
How to Choose the Best Funds?
These funds have been selected after considering some key parameters, as under:
1. Mean Rolling Returns: We considered mean rolling returns on a daily basis for the last three years for evaluating consistency.
2. Consistency: Measured through Hurst Exponent, which gives an idea about predictability and therefore the stability in the fund’s returns.
3. Downside Risk: Computed using only negative returns, where the lower the value, the lesser the losses incurred by the fund.
4. Outperformance: Calculated by Jensen’s Alpha, which measures risk-adjusted returns of the fund in relation to what the market expects.
5. Asset Size: The asset size is limited to only those funds that have assets over Rs 50 crore for sufficient scale and stability.
Conclusion
These criteria ensure that the recommended funds offer strong returns with proper risk management and, hence are suitable choices for conservative investors in a volatile market. Look for our updates each month to catch all the latest performance insights.
