Large-cap funds have to invest 80% or more of their assets in equity and equity-related instrument of large-cap companies; as per Securities and Exchange Board (SEBI) definition a large-cap company is:
- 1st -100th company in terms of full market capitalization.
Key Features of Large-Cap Companies:
- Large-cap companies have a better reputation, are more trustworthy and have better financial compared to small-cap and mid-cap companies.
- Most of the large-cap companies are operating for a long time hence they have long financial and operation records.
- Expected to have better corporate governance
- Large-cap companies are tracked by almost all big-equity analyst.
Advantage of Investing in the Large-Cap Mutual Funds:
Some of the advantages of investing in a large-cap mutual fund is following:
- Low risk compared to mid & small-cap funds. (You can check out our fund category by risk article here)
- Steady returns for capital appreciations and dividend.
- Better risk-adjusted return on investment compared to mid & small-cap funds.
| Rolling Return | Start Date | End Date | Months |
|---|---|---|---|
| 1 Year | 30-November-2017 | 31-October-2020 | 36 |
| 3 Year | 30-November-2015 | 31-October-2020 | 60 |
We have taken a weighted average of both one year and three-year rolling returns and compared it to the interest rate on fixed deposits. The interest rate on fixed deposit used in this analysis is the average interest rate of the last five years. The average interest rate on the FD rate in this period was 6.73%.
Top Five Large-Cap Funds
Table 2 shows the top five large-cap funds by weighted average rolling returns.
Table 2: Top Performing Large Cap Funds
| Fund Name | Weighted Average Return (1Y Return:50%, 3Y Return 50%) | Weighted Average Return Rank | 1 Year Rolling Return | 3 Year Rolling Return Annualised | Drawdown | EVaR 1 Year | Sharpe Ratio | Return More Than Interest on FD |
|---|---|---|---|---|---|---|---|---|
| Axis Bluechip Fund | 10.27% | 1 | 7.13% | 13.41% | -19% | -26% | 0.22 | Yes |
| Canara Robeco Bluechip Equity Fund | 9.11% | 2 | 6.91% | 11.3% | -22% | -26% | 0.17 | Yes |
| Mirae Asset Large Cap Fund | 8.57% | 3 | 4.55% | 12.59% | -28% | -24% | 0.15 | Yes |
| Edelweiss Large Cap Fund | 6.97% | 4 | 3.48% | 10.46% | -27% | -25% | 0.05 | Yes |
| IDFC Large Cap Fund | 6.38% | 5 | 3.03% | 9.73% | -25% | -22% | 0.07 | Yes |
Axis Bluechip Fund has generated good returns in the last five years. Sharpe ratio is also high for this fund and has the lowest drawdown. Other two top funds Canara Robeco Bluechip Equity Fund and Mirae Asset Large Cap Fund performance is good.
Disclaimer past performance is not a guarantee of future performance.