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Best Large Cap Mutual Funds to Invest in 2022 – Top Performing Large Cap Mutual Funds in India

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Aug 20, 2022

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Large cap mutual funds put money into market leaders which have the flexibility to generate steady returns even amidst inventory market chaos, just like the one we witnessed in 2021. So, as a mutual fund investor, massive cap mutual funds are a should in your portfolio.

But discovering the most effective massive cap mutual funds for 2022 is normally a difficult train for many traders as a result of the big cap mutual fund class in India has round 30 massive cap schemes and an Assets Under Management (AUM) of Rs 2,32,154 crore as of July 31, 2022.

With all these 30 massive cap mutual funds investing in the identical 100 corporations, it will be important for traders to put money into solely the most effective massive cap mutual funds in 2022 to really make a distinction of their portfolio.

So, that are the most effective massive cap mutual funds to put money into 2022? That is exactly what we will probably be answering on this article.

We at PersonalFN have shortlisted the 4 finest massive cap mutual funds for 2022. But earlier than we reveal our listing of finest Large Cap Funds for 2022, allow us to check out the fundamentals of huge cap mutual funds

What are Large Cap Mutual Funds?

The Securities and Exchange Board of India (SEBI) defines massive cap mutual fund as ‘an open-ended fairness mutual fund investing a minimal 80% of its complete property in fairness and fairness associated devices of huge cap corporations’.

Large cap corporations, also referred to as blue chip corporations, are the highest 100 corporations when it comes to market capitalisation. Large cap corporations usually have a market capitalisation of greater than Rs 20,000 crore. Some of the most well-liked massive cap corporations embrace Reliance Industries Ltd, Tata Consultancy Services Ltd, HDFC Bank Ltd, Infosys, HUL, and many others.

So, a big cap mutual fund will use minimal 80% of its complete property to purchase shares of such blue-chip market leaders. The fund supervisor has the liberty to take a position the remaining 20% corpus in shares of mid and small cap corporations or debt devices or just maintain the steadiness 20% in money to deal with redemption pressures.

Examples of Large Cap Mutual Funds in India

Scheme Name AUM (Rs Crore)
Axis Bluechip Fund 35,915
Mirae Asset Large Cap Fund 32,913
SBI BlueChip Fund 32,773
ICICI Pru Bluechip Fund 32,525
Aditya Birla SL Frontline Equity Fund 21,534
HDFC Top 100 Fund 21,498
Nippon India Large Cap Fund 11,724
UTI Mastershare 10,136
Canara Rob Bluechip Equity Fund 7,593
Franklin India Bluechip Fund 6,374

AUM knowledge as of July 31, 2022
(Source: ACE MF)

 

What are the benefits of investing in Large Cap Mutual Funds?

Large cap mutual funds put money into market leaders which have a market capitalisation of greater than Rs 20,000 crore. This funding technique helps a big cap fund manoeuvre by way of market phases and tide over volatility. Apart from being market leaders, blue chip shares (or corporations) have well-established model recall worth, financial moats, aggressive pricing, moral, and environment friendly administration, governance and compliance practices, strong steadiness sheet, surplus money reserves. And most significantly, they benefit from the buyer loyalty that helps them tide over the powerful instances.

Top inventory holdings of Large Cap Funds

Top stock holdings of Large Cap Funds

Data as of July 31, 2022
(Source: ACE MF)

 

Let us now check out the benefits of massive cap mutual funds.

1) Stable returns amidst financial turmoil 

The market leaders that enormous cap mutual funds put money into are corporations with sturdy model worth and luxuriate in buyer loyalty, which is particularly essential throughout market downturns. For e.g.: During the pandemic, households throughout the nation lowered their expenditure to solely important gadgets, however they didn’t shift their shopper preferences from their common manufacturers resembling Colgate and Pepsodent, though cheaper alternate options like Dantkanti and Meswak have been accessible.

This is the ability of name recall and buyer loyalty. So, blue chip corporations like Nestle, Hindustan Unilever Ltd, amongst others managed to submit respectable income numbers whereas every part round them was crumbling. Hence, massive cap mutual funds are perfect for traders as they put money into corporations which are capable of handle financial downturns on the again of a powerful steadiness sheet and buyer loyalty.

2) Regular dividend funds 

Generally, an organization pays dividends from the surplus revenue that it generates. But since mid and small sized corporations use their extra income to reinvest in their very own operations, mid and small cap mutual funds don’t present common dividends. But this isn’t the case with massive cap mutual funds.

Large cap corporations have big money reserves, so even when they don’t make income in a selected yr, they nonetheless have the bandwidth to pay dividends from their reserves and surpluses. So, massive cap mutual funds are perfect for retirees or conservative traders trying to earn common earnings from their portfolio.

Best Large Cap Mutual Funds to Invest in 2022 – Top Performing Large Cap Mutual Funds in India

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3) Helps in investing in prime massive cap shares with only one fund 

For a second, think about that there aren’t any massive cap funds. Now what do you do if you wish to put money into the highest 100 corporations listed on the trade? You haven’t any possibility however to purchase particular person shares, which implies your funding quantity needs to be in lakhs simply to purchase one share every of those 100 blue chip corporations. But with massive cap funds, you possibly can put money into the most effective of those 100 corporations with simply Rs 100 by way of a scientific funding plan (SIP). Another massive benefit of a giant cap fund is that you’ve got an knowledgeable fund supervisor who’s accountable for choosing the right massive cap shares with the purpose to generate alpha for unitholders.

[Must Read:  Best Mutual Funds for SIP]

What are the dangers concerned in Large Cap Mutual Funds?

Since Large Cap Mutual Funds put money into equities, they’re susceptible to market fluctuations. However, the danger is comparatively decrease in comparison with its friends within the Mid-cap Fund and Small-cap Fund class. Moreover, Large Cap Fund could not generate terribly excessive returns as a result of large-sized corporations already maintain vital market share and due to this fact, they develop at a slower tempo.

Who ought to put money into Large Cap Mutual Funds?

Large Cap Mutual Funds are appropriate for traders searching for regular development of capital by way of equities however don’t need to assume very excessive danger. It is advisable to have a long-term funding horizon of not less than 3-5 years when investing in Large Cap Funds.


 

How a lot to put money into Large Cap Mutual Funds?

With vital publicity to market leaders, Large Cap Mutual Funds are much less more likely to be impacted by financial slowdown and market correction. Therefore, these funds ought to ideally kind a part of the Core fairness portfolio of each investor. However, the precise allocation within the portfolio will depend upon numerous components resembling your monetary objectives, danger urge for food, and funding horizon.

Conservative traders and traders with reasonable danger urge for food ought to ideally have increased allocation to Large Cap Funds (round 50-70% or extra of their fairness portfolio), and the steadiness might be in Mid-cap Funds, Value Funds, Flexi Cap Funds, and many others.

On the opposite hand, aggressive traders can take into account allocating 30-50% of their fairness property in Large Cap Funds.

Avoid investing in Large Cap Funds in case you have a really short-term funding horizon of, say, 6 months, 1 yr, or 2 years.

How are Large Cap Mutual Funds taxed?

Large cap mutual funds are equity-oriented mutual funds and therefore they comply with fairness taxation. The holding interval for giant cap mutual funds from a tax perspective is 12 months. So, in the event you promote your massive cap fund items earlier than 12 months, you pay short-term capital features (STCG) tax of flat 15%.

On the opposite hand, in the event you promote your massive cap fund items after finishing one yr, you pay a long-term capital features tax of 10% with indexation, however provided that your features exceed Rs 1 Lakh in a monetary yr. If your long-term features are beneath Rs 1 Lakh and also you redeem after finishing one yr, then you definitely should not have to pay any tax on these features.

4 finest Large Cap Mutual Funds to Invest in 2022

With the fundamentals of huge cap funds achieved, allow us to now transfer on to the listing of the most effective massive cap funds to put money into 2022. This listing of finest massive cap funds for 2022 is a results of excessive scrutiny of every of the 33 massive cap funds in India on each qualitative and quantitative components. These 4 finest massive cap funds for 2022 have the calibre to generate persistently superior long-term returns while curbing the draw back dangers throughout market downturns.

These prime quality schemes have been fastidiously shortlisted utilizing our proprietary SMART Score Matrix that provides excessive weightage to each quantitative and qualitative parameters to determine true long run performers.

List of Best Large Cap Mutual Funds to Invest in 2022

Past efficiency is just not an indicator for future returns
Data as of August 18, 2022
(Source: ACE MF)

 

Let us take an in-depth take a look at every of those 4 finest massive cap mutual funds to put money into 2022.

Best Large Cap Mutual Fund to Invest in 2022 #1: Canara Robeco Bluechip Equity Fund

Launched over a decade again in August 2010, Canara Robeco Bluechip Equity Fund is a comparatively small-sized scheme within the Large-cap Fund class. It has recorded superior development over the previous few years and has lately caught the eye of traders. Over the final 5-years, Canara Robeco Bluechip Equity Fund has registered a compounded annualised development of round 15.7%, as in opposition to about 13.9% CAGR delivered by its benchmark S&P BSE 100 – TRI index. This outperformance has come at a far cheap danger when in comparison with the benchmark and class common.

Top portfolio holdings of Canara Robeco Bluechip Equity Fund

Data as of July 31, 2022
(Source: ACE MF, PersonalFN Research)

 

Canara Robeco Bluechip Equity Fund normally holds a fairly-diversified portfolio of about 45 to 50 shares. As of July 31, 2022, the fund held 43 shares in its portfolio unfold throughout sectors. Index heavyweights like ICICI Bank, HDFC Bank, Reliance Industries, Infosys, and SBI at the moment discover a place within the prime portfolio holdings. In phrases of sector, Banking & Finance, Infotech, Consumption, Petroleum, and Auto kind a part of the fund’s core holdings.

Performance throughout market phases of Canara Robeco Bluechip Equity Fund

Scheme Name Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase
09/Mar/09 To 05/Nov/10 05/Nov/10 To 20/Dec/11 20/Dec/11 To 03/Mar/15 03/Mar/15 To 25/Feb/16 25/Feb/16 To 14/Jan/20 14/Jan/20 To 23/Mar/20 23/Mar/20 To 18/Aug/22
Canara Rob Bluechip Equity Fund -13.02 25.19 -20.59 18.90 -30.52 40.30
Category Average – Large Cap Fund 74.78 -22.98 27.39 -19.11 16.33 -34.71 40.70
S&P BSE 100 – TRI 83.58 -26.25 26.30 -21.53 17.29 -38.01 45.71

Past efficiency is just not an indicator for future returns
Data as of August 18, 2022
(Source: ACE MF, PersonalFN Research)

 

During the market crash of 2020, Canara Robeco Bluechip Equity Fund managed to outperform the benchmark by a noticeable margin of seven.5 proportion factors and the large-cap class common by over 4 proportion factors. The fund has proven cheap efficiency within the current bull part as nicely in comparison with its friends and has the potential to reward traders over the whole market cycle going ahead.

Backed by a well-defined funding course of, Canara Robeco Bluechip Equity Fund has the flexibility to well timed decide high quality names having excessive development potential, and ship market-beating returns in the long term.

Click right here to learn our detailed evaluation on Canara Robeco Bluechip Equity Fund.

Best Large Cap Mutual Fund to Invest in 2022 #2: ICICI Prudential Bluechip Fund

Launched in May 2008, ICICI Prudential Bluechip Fund is among the largest schemes within the Large Cap Fund class. The fund focuses on investing within the prime 100 corporations listed on the NSE by which the fund supervisor has excessive conviction. Over the previous 5 years, the fund has appreciated at 13.6% CAGR, which is basically according to the benchmark returns. ICICI Prudential Bluechip Fund has generated respectable risk-adjusted returns for its traders, its Sharpe ratio is forward of the benchmark and the class common.

Top portfolio holdings of ICICI Pru Bluechip Fund

Graph 2 Graph 2

Data as of July 31, 2022
(Source: ACE MF, PersonalFN Research)

 

As of July 31, 2022, ICICI Prudential Bluechip Fund held a big portfolio of 70 shares, which incorporates 2 offshore equities. The fund held its main publicity in index heavyweights resembling ICICI Bank, Reliance Industries, HDFC Bank, Infosys, and L&T. In phrases of sector, ICICI Prudential Bluechip Fund’s portfolio is skewed in the direction of Banking and Finance together with vital publicity to Infotech, Petroleum, Auto & Auto Ancillaries, Engineering, Pharma, amongst others.

Performance throughout market phases of ICICI Pru Bluechip Fund

Scheme Name Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase
09/Mar/09 To 05/Nov/10 05/Nov/10 To 20/Dec/11 20/Dec/11 To 03/Mar/15 03/Mar/15 To 25/Feb/16 25/Feb/16 To 14/Jan/20 14/Jan/20 To 23/Mar/20 23/Mar/20 To 18/Aug/22
ICICI Pru Bluechip Fund 84.75 -17.91 27.36 -19.46 17.78 -37.29 44.96
Category Average – Large Cap Fund 74.78 -22.98 27.39 -19.11 16.33 -34.71 40.70
NIFTY 100 – TRI 80.44 -26.23 26.56 -20.58 17.35 -37.91 44.83

Past efficiency is just not an indicator for future returns
Data as of August 18, 2022
(Source: ACE MF, PersonalFN Research)

 

ICICI Prudential Bluechip Fund has displayed its skill to restrict the draw back danger for its traders throughout unsure and extremely risky market situations, whereas it has additionally rewarded with above-average returns throughout market rallies.

ICICI Prudential Bluechip Fund has a confirmed observe document of figuring out essentially sound shares within the large-cap house and has displayed its skill to generate above-average returns when in comparison with its friends.

Click right here to learn our detailed evaluation on ICICI Pru Bluechip Fund.

Best Large Cap Mutual Fund to Invest in 2022 #3: Mirae Asset Large Cap Fund

Mirae Asset Large Cap Fund is among the hottest schemes within the Large Cap Mutual Fund class. The prudent funding methods adopted by the fund have earned it a tag of being a constant performer that has rewarded long-term traders nicely over the long term. Over the final 5 years, Mirae Asset Large Cap Fund has appreciated at a CAGR of round 13.8%, which is broadly according to the returns delivered by the present benchmark Nifty 100 – TRI index. Its skill to ship cheap risk-adjusted returns, whereas limiting the draw back danger differentiates the fund from the remainder.

Top portfolio holdings of Mirae Asset Large Cap Fund

Graph 2 Graph 2

Data as of July 31, 2022
(Source: ACE MF, PersonalFN Research)

 

Mirae Asset Large Cap Fund invests in a well-diversified portfolio of about 50-65 shares. As of July 31, 2022, the fund held 63 shares in its portfolio. Its main publicity is in extremely liquid massive cap names like ICICI Bank, HDFC Bank, Infosys, Reliance Industries, and Axis Bank. In phrases of sector, round 35.5% of the fund’s portfolio is at the moment skewed in the direction of Banking and Finance shares, adopted by Infotech, Petroleum, Consumption, and Pharma, amongst others.

Performance throughout market phases of Mirae Asset Large Cap Fund

Scheme Name Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase
09/Mar/09 To 05/Nov/10 05/Nov/10 To 20/Dec/11 20/Dec/11 To 03/Mar/15 03/Mar/15 To 25/Feb/16 25/Feb/16 To 14/Jan/20 14/Jan/20 To 23/Mar/20 23/Mar/20 To 18/Aug/22
Mirae Asset Large Cap Fund 104.76 -21.22 32.48 -17.40 20.37 -37.34 43.42
Category Average – Large Cap Fund 74.78 -22.98 27.39 -19.11 16.33 -34.71 40.70
NIFTY 100 – TRI 80.44 -26.23 26.56 -20.58 17.35 -37.91 44.83

Past efficiency is just not an indicator for future returns
Data as of August 18, 2022
(Source: ACE MF, PersonalFN Research)

 

Mirae Asset Large Cap Fund has not solely delivered superior returns throughout market rallies however has additionally carried out nicely throughout depressed market situations. In the current bull part, it stood among the many prime performers within the class, although it has barely trailed the benchmark.

The fund is nimble in its strategy and has a historical past of taking well timed sector bets which helps it to sort out market volatility and provide stability to the portfolio.

 

Click right here to learn our detailed evaluation on Mirae Asset Large Cap Fund.

Best Large Cap Mutual Fund to Invest in 2022 #4: UTI Mastershare Fund

Launched method again in October 1986, UTI Mastershare Fund is India’s oldest fairness mutual fund scheme. Categorised as a Large Cap Fund, UTI Mastershare Fund predominantly invests in main companies with bigger market capitalisation accessible at cheap valuations after contemplating the anticipated earnings development. In the final 5 years, UTI Mastershare Fund grew at a CAGR of about 14% which is almost according to the returns generated by its benchmark S&P BSE 100 – TRI over the identical time interval. UTI Mastershare Fund additionally stands sturdy when it comes to risk-adjusted returns, its Sharpe Ratio is increased than that of the class common in addition to the benchmark.

Top portfolio holdings of UTI Mastershare fund

Graph 2 Graph 2

Data as of July 31, 2022
(Source: ACE MF, PersonalFN Research)

 

UTI Mastershare Fund normally holds a reasonably large portfolio of round 45-50 shares. As of July 31, 2022, the fund held as many as 50 shares in its portfolio. ICICI Bank is at the moment the highest holding having an allocation of 9.7%, adopted by Infosys, HDFC Bank, Bharti Airtel, Reliance Industries, amongst others. In phrases of sector, Financial companies prime the listing whereas Infotech, Consumption, and Pharma are the opposite core holdings within the fund’s portfolio.

Performance throughout market phases of UTI Mastershare Fund

Scheme Name Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase
09/Mar/09 To 05/Nov/10 05/Nov/10 To 20/Dec/11 20/Dec/11 To 03/Mar/15 03/Mar/15 To 25/Feb/16 25/Feb/16 To 14/Jan/20 14/Jan/20 To 23/Mar/20 23/Mar/20 To 18/Aug/22
UTI Mastershare Fund 66.66 -20.93 26.99 -20.64 15.62 -34.10 42.11
Category Average – Large Cap Fund 74.78 -22.98 27.39 -19.11 16.33 -34.71 40.70
S&P BSE 100 – TRI 83.58 -26.25 26.30 -21.53 17.29 -38.01 45.71

Past efficiency is just not an indicator for future returns
Data as of August 18, 2022
(Source: ACE MF, PersonalFN Research)

 

While the fund has not been capable of generate vital alpha over the benchmark throughout bull market phases, it has achieved nicely to include the draw back dangers throughout bearish phases.

Overall, UMF has positioned itself as a dependable fund having a gentle observe document and is nicely able to producing respectable capital appreciation at decrease danger.

Click right here to learn our detailed evaluation on UTI Mastershare Fund.

This completes our listing of the 4 finest massive cap mutual funds to put money into 2022. The solely factor left to do now could be to put money into these finest massive cap funds and reap the advantages of investing in market leaders.

If you need tremendous compressive and detailed analysis experiences on the most effective massive cap mutual funds for 2022 and different diversified fairness mutual funds to put money into, subscribe to  PersonalFN’s premium analysis service, FundChoose.

PersonalFN’s FundChoose service offers insightful and sensible steerage on the mutual fund schemes to Buy, Hold, and Sell. We may even assist you select a number of the finest Equity Linked Saving Schemes (ELSS) on your tax-saving with PersonalFN’s premium analysis service, FundChoose. You additionally get entry to our particular experiences, together with the newest Tax Saving Mutual Fund Report. Here’s a peak on the 3 finest ELSS funds for 2022.

At PersonalFN, we apply a number of qualitative and quantitative parameters utilizing the S.M.A.R.T rating matrix.

S – Systems and Processes

M – Market Cycle Performance

A – Asset Management Style

R – Risk-Reward Ratios

T – Performance Track Record

The stringent course of has helped our valued mutual fund analysis subscribers to personal a number of the finest mutual fund schemes of their funding portfolio with a commendable long-term efficiency observe document. PersonalFN’s service is apt if you’re searching for insightful steerage and suggestions on some worthy funds having excessive development potential within the years to return.

If you might be critical about investing in a rewarding mutual fund scheme, subscribe now!

 

Warm Regards,
Divya Grover
Research Analyst

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