Investing in large-cap funds is lucrative for folks who are interested in the equity markets, however, have less risk appetite. These funds are also called bluechip funds.
Large-cap Mutual Fund Investment
According to the SEBI regulation, a large-cap mutual fund will invest in the top 100 listed companies/stocks, depending on their market capitalization, – by which the companies are considered to be steady. These companies are popular for generating regular dividends. With the consistent compounding of wealth, these equities provide security, and they tick assured returns over the years. The large-cap investment is generally opted by long-term investors, even if the returns are lesser than mid-cap or small-cap funds.
The IDBI India Top 100 Equity Fund and the Canara Robeco Bluechip Equity Fund are two of those mutual funds, that invest mostly in large-cap funds. Hence, these are also called Bluechip Equity Funds. Here are the top 2 bluechip mutual funds, rated highest by Crisil.
1. IDBI India Top 100 Equity Fund
The IDBI India Top 100 Equity Fund has been rated 5 star by Crisil, and among 99.4% investment in the Indian stocks, they hold 70.28% in the large-cap stocks, 11.71% in the mid-cap stocks, and 5.67% in the small-cap stocks. Additionally, this fund also invests 0.02% in Debt. It is has recorded a 12.40% growth in the last 6 months, 32.24% growth in the last 1 year, 21.00% in the last 3 years, and 17.41% in the last 5 years. In the last 1 year, this fund’s return has been comparatively better than the category peer funds.
This fund’s net asset value (NAV) or per-unit price is Rs. 43.15. This fund’s AUM is Rs. 540.08 Crore, and the Expense Ratio is 1.33%. This fund’s top 5 portfolio holdings are HDFC Bank, Reliance Industries, ICICI Bank, Infosys, and Housing Development Finance Corporation Ltd. – Housing finance. The IDBI India Top 100 Equity Fund has an investment in 5 banking stocks and 1 NBFC stock (Bajaj Finance), among the top 10 holdings.
2. Canara Robeco Bluechip Equity Fund – portfolio
Canara Robeco Bluechip Equity Fund is a Direct Plan, which has also been rated 5 star by reputed research firm Crisil. This fund invests around 96.5% in Indian stocks, among which 73.95% is invested in large-cap stocks, and about 9.76% in mid-cap stocks. The Canara Robeco Bluechip Equity Fund has recorded a 9.30% growth in the last 6 months, 26.90% growth in the last 1 year, 22.50% growth in the last 3 years, and 21.00% growth in the last 5 years. So, in the past year, this mutual fund has given the best return.
This fund’s net asset value (NAV) or per-unit price is Rs. 45.59. This fund’s AUM is Rs. 5208.28 Crore, and the Expense Ratio is 0.36%. The top 5 holdings by this fund are, Infosys Ltd. – Computers software, ICICI Bank, HDFC Bank, Reliance Industries – Refineries/marketing, and the Tata Consultancy Services – Computers software. Among the top 10 positions of the fund, 4 positions are in the banking sector and 1 position in the NBFC sector (Bajaj Finance).
If you are thinking of long-term large-cap mutual funds, then these funds can be on your checklist. However, the Canara Robeco Bluechip Equity Fund is far popular in the peer because of its gigantic AUM, while the other fund’s AUM is quite lower than this. So, the Canara fund is better secured. But, in terms of return, the IDBI India Top 100 Equity Fund has certainly performed better in the past 3 years. But the 5 years’ returns are better with the Canara Robeco Bluechip Equity Fund. So, you should select any mutual fund based on your risk appetite and the preferred term of the investment.
Even if the large-cap mutual fund offers better security, the returns from them are less than the mid-cap and small-cap mutual funds. The bluechip funds have existed in the market for a very long time, with a good reputation. These are not developing or growing companies. So, they, certainly provide lesser upside. However, if you are looking for long-term investment (around 4 years) in a particular fund, with better security, the large-cap funds can be ideal. The above-mentioned funds are a well-poised investment opportunity in the category peer, with an additional look out of the 5 star rating by Crisil.
(Data Recorded Till December 29, 2021)
The above mutual funds were picked from Crisil Ratings. Investing in equities, SIPs and mutual funds can pose a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the rating agency are not liable for any losses caused as a result of decisions based on the article.