Large Cap Mutual Funds

Large Cap organizations are established players and come with a fair reputation and vintage. They have a stable corporate administration that makes them trustworthy.

As of late, SEBI's recategorization has modified the foundation to determine whether an organization is Large Cap, small-cap, or mid-cap. Large Cap organizations are those that constitute the top 100 companies in terms of market capitalization.

The top Large Cap funds are the funds that invest larger proportions of their assets under management (AUM) in equity shares that belong to companies that constitute top 100 when it comes to market capitalisation, such as Britannia ITC, HUL, and more. These companies that fall under this bracket are are known to have a high reputation in the market. With the best Large Cap funds, you can be assured that you are investing in companies that have an excellent track record of performing well in medium to long term horizon.

When contrasted with small-cap and mid-cap funds, these funds tend to pose a lesser risk and might be perfect for risk averse investors.

Large Cap should be a choice for those individuals who need to make good use of equity investments but don't need their returns to keep on fluctuating with time. Since Large Cap funds are known to be financially stable, they are capable of withstanding bear markets.

Large Cap funds give a sort of much-needed steadiness (from an investor's point of view) to your investment profile, so much so that you might even think of adjusting the focus of your investment around them so that they form a major chunk of your investment portfolio.

However, one of the problems that might arise even with the best Large Cap funds is that they might fail to meet expectations of return in the market when contrasted with mid-cap or small-cap equity.

Large Cap Funds are ideal for investors who are looking for steady returns with relatively lower risk. These funds rely upon the horizon of your investment. To make the best out of these funds, it is recommended that you should invest in them for at least five to seven years. For investors with higher risk appetite, are better off by investing in Mid-cap or Small-cap funds.

• Investment risks:

  Large Cap equity funds are also liable to the several risks that come with the market. However, these risks tend to be quite moderate. When you compare them to small-cap or mid-cap funds, the Net Asset Value (NAV) fluctuations are relatively small.

• Expense Ratio:

  Like all mutual funds, Large Cap mutual funds come with an expense so that your investment is well-managed. This is called the expense ratio of a fund, a lower expense ratio can help to balance means higher take home profits.

• Investment Horizon:

  Large Cap equity funds work best for those who want to invest for the medium to long run - people who invest in these funds should be invested in it for at least three to five years so as to witness the potential of returns on offer.

• Tax on Capital Gains:

  Large Cap funds receive the same tax Treatment as other equity assets. Capital gain earned on the holding period of as long as one year are called short term capital gains (STCG). These attract 15% of tax. On the other hand, long term capital gains (LTCG) have an investment period of over one year. According to the prevailing tax rate , the LTCG that fall over ₹ 1 lakh is taxed at 10% without indexation advantage.

To make things simpler, we have compiled a list of Large Cap Mutual Funds with highest returns in last three years. Investors looking to invest in Large Cap Funds should pick the one that meets their investment objectives.