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Best Large Cap Mutual Funds to Invest in 2014

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Large Cap Mutual Funds for 2014

 

Large cap funds may look disappointing during market rallies, but during bear phases their ability to check the fall makes them compelling

 

Large Cap Funds are safe, have predictable returns, easy to understand and less volatile to market swings compared to other diversified equity funds. These funds mirror the performance of the economy and are geared to handle market cycles better. Unlike mid- and small-cap stocks that may not last through a long down market cycle, large-caps have the size and scale to weather the bad market phase.

 

The large cap universe comprises some of the biggest companies, which are well represented in the more frequently tracked indices such as the Sensex and the Nifty.

 

The flipside of investing in these funds is that they do not deliver exceptional returns in a rising market. The sheer scale and size of stocks in this category means their growth is not as high during a turnaround as it would be for mid- and small-cap stocks, which are nimble

 

These cost less as they have low expense ratio compared to actively-managed funds. However, investors pay for fund management to ride on the fund manager's ability to pick winners. After analysing, the performance of actively managed funds comes out as far superior than passively-managed funds. The 5-year trailing returns indicate that over 50 per cent of the actively-managed funds have delivered superior returns than Nifty. The gap in the two widens when one looks at long-term performance. For instance, over a 10-year period, from the universe of 32 funds, the average of the actively-managed funds posted 22.58 per cent returns compared to the average return of 17.94 per cent delivered by passive funds for the same period. The case for active management exists, and it is desirable for an actively-managed fund to beat its benchmark index significantly.

 

These are India's finest large cap funds:

 

BNP Paribas Equity     Invest Online


The fund struggled in 2008 and 2009. Since then, it has been impressively following a well-articulated strategy to focus on companies with superior earning growth. To this end it chooses companies with pricing power for their competitive advantage or entry barriers. This has translated into a diverse portfolio of quality large caps and few quality mid-caps. This has led to a resilient portfolio during market downturns which also does well in a rising market.

 

Franklin India Bluechip        Invest Online


In its near 20-year history, this fund has come out unscathed, despite market ups and downs, due to its style purity. After its initial three-year closed-end term got over, the fund has always carried a large cap bluechip portfolio. Its stock selection strategy follows a combination of value and growth approach to investing, with over 90 per cent equity allocation even during the market crash of 2008. The fund is a proven good choice for stable returns.

 

HDFC Index Sensex Plus          Invest Online


This fund invests 80-90 per cent of its portfolio in Sensex stocks, with weights close to the index. The select stock picks outside the Sensex such as Solar Industries and India Glycols have helped this fund beat the benchmark. For investors, such an approach provides the benefits of index-linked returns with low risk. In its 10-year history, this fund has done better than the category average on 9 instances and the solitary loss came only in the frothy market of 2007.

 

ICICI Prudential Focused Bluechip Equity          Invest Online


Launched during the financial crisis of 2008, this fund has done well by sticking to its mandate of investing in 20-25 large cap stocks. The fund follows a bottom-up approach to stock selection. In this fund, the manager has the flexibility to meaningfully show his preference and dislike in his portfolio. So far, this has worked very nicely with its large-cap orientation. The fund cannot have more than 10 per cent in cash. Its average equity allocation has been 93 per cent.

 

 

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Best Performing Mutual Funds

    1. Largecap Funds             Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds         Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds          Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds   Invest Online

      1. DSP BlackRock MicroCap Fund

2.       Franklin India Smaller Companies

E. Sector Funds          Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds      Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds        Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds         Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

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