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Amid rising global uncertainties—such as inflation, trade tensions, and volatile foreign investments—large-cap funds are emerging as a preferred option due to their stability and strong domestic focus. Top asset management companies like Axis, ICICI Prudential, and Nippon India are actively investing in sectors like financials, consumer staples, healthcare, and defense. In this environment, large-cap funds present an attractive opportunity for investors seeking a balance between caution and long-term growth.
Several mutual fund advisors are also currently recommending large-cap mutual funds for the ongoing financial year. They believe this category is well-positioned to perform as markets become increasingly expensive. With the stock market hitting record highs and potential volatility ahead, advisors suggest that conservative investors seeking relatively safer equity options for long-term goals should consider large-cap schemes. However, it’s important to first understand what large-cap mutual funds are and assess the current market conditions before making any investment decisions. So in this Blog, we will provide complete information on the basics and the working mechanism of large cap mutual Funds for the ease of the Investors.
What are Large Cap Mutual funds?
Large Cap Mutual Funds are basically equity mutual funds that allocate a minimum of 80% of their total assets to shares and equity-related securities of the top 100 Indian companies, which are ranked by market capitalization.
These companies are generally industry leaders with a solid performance history, widespread investor confidence, and a reputation for paying regular dividends.
Examples of such companies include:
- Reliance Industries Ltd.
- Tata Consultancy Services (TCS)
- HDFC Bank
- Infosys Ltd.
- ICICI Bank
- Larsen & Toubro (L&T)
- ITC Ltd.
- Bharti Airtel
- Hindustan Unilever Ltd. (HUL)
- State Bank of India (SBI)
These companies form the core holdings of many large-cap mutual funds due to their financial strength and market leadership.
Features of Large Cap Mutual Funds
- Investment in Leading 100 Companies
Large cap mutual funds allocate a minimum of 80% of their portfolio to equities and related instruments of India’s top 100 companies, ranked by market capitalization. - Relatively Stable with Lower Market Fluctuations
By investing in financially strong and established companies, large cap mutual funds tend to experience less volatility compared to mid- and small-cap funds, making them ideal for cautious equity investors. - Steady Growth Over the Long Term
Large cap mutual funds are well-suited for investors with a long-term outlook of over 5 years, aiming to build wealth gradually through consistent capital appreciation. - Easy Access to Funds
As open-ended mutual funds, large cap mutual funds allow investors to purchase or redeem units anytime at the prevailing NAV, offering high liquidity and flexibility. - Balanced Risk Exposure
Although market risks exist, large cap mutual funds carry relatively lower risk compared to mid- and small-cap funds, thanks to the stability and reliability of well-established large-cap companies. - Sector-Wide Diversification
Large cap mutual funds typically spread their investments across various industries like banking, IT, FMCG, healthcare, and energy, helping to minimize risks tied to individual companies. - Possibility of Regular Dividends
Large cap companies are known for consistent dividend payouts, so these funds may provide periodic income through dividends, especially under IDCW (Income Distribution cum Capital Withdrawal) plans. - Expert Management and Research-Backed Decisions
Large cap mutual funds are overseen by skilled fund managers who rely on in-depth research and actively manage the portfolio through informed stock selection and periodic rebalancing. - Tax Implications
Long-term capital gains (LTCG) above ₹1 lakh are taxed at 10%, while short-term capital gains (STCG) are taxed at 15%.
Best Large Cap Mutual Funds to Invest in 2025
| Fund Name | 3Y Returns (% CAGR) | Expense Ratio | AUM (₹ Cr) | Rating |
| Axis Bluechip Fund | ~15.95% over 3 years | 0.69% (Direct Plan) | ₹33,412.8 Cr (as of Jul 3, 2025) | ★★★–★★★★ (Very high risk; “Exceptional” per Morningstar) |
| Canara Robeco Bluechip Equity Fund | ~19.75% over 3 years | 1.65% (Regular Plan) | ₹16,028 Cr | ★★★★ (4★ per Value Research; “Exceptional” per Morningstar) |
| Mirae Asset Large Cap Fund | ~17.00% over 3 years | 0.54% (Direct Plan) | ₹39,530 Cr | ★★★★ (Top quartile; “Above Average” returns) |
| Baroda BNP Paribas Large Cap Fund | ~21.90% over 3 years | 0.76% (Direct Plan) | ₹2,613 Cr | ★★★★ (Exceptional 5-year returns) |
| Edelweiss Large Cap Fund | ~18.00% over 3 years | 0.61% (Direct Plan) | ₹1,271 Cr | ★★★★ (Top quartile; “Exceptional” 5-year returns) |
Highlights from the above Table
- The 3-year CAGR returns are sourced from platforms such as Value Research, INDmoney, Groww, and official fund documents.
- Expense ratios mentioned are for Direct Plans, which are preferred by long-term investors due to lower costs.
- AUM (Assets Under Management) figures are updated as of late May to early July 2025.
- Fund ratings represent a mix of star ratings from Value Research and qualitative performance labels like “Exceptional” from Morningstar and Livemint.
History and Overview
1. Axis Mutual Fund
- Founded: October 2009
- Promoter: Axis Bank Ltd.
- About: Axis Mutual Fund, managed by Axis Asset Management Co. Ltd., is among India’s top AMCs. It follows a research-focused approach and has earned a reputation for stable performance.
- Notable Scheme: Axis Bluechip Fund – focuses on long-term investments in high-quality large-cap stocks.
2. Canara Robeco Mutual Fund
- Founded: 1993 (as Canbank Mutual Fund); became a JV with Robeco in 2007
- Promoters: Canara Bank (India) and Robeco Group (Netherlands)
- About: One of India’s most established mutual funds, Canara Robeco blends Indian banking experience with Robeco’s global asset management expertise.
- Notable Scheme: Canara Robeco Bluechip Equity Fund – recognized for its large-cap focus and emphasis on risk-adjusted growth.
3. Mirae Asset Mutual Fund
- Established in India: 2008
- Parent Organization: Mirae Asset, South Korea (founded in 1997)
- About: Mirae Asset Mutual Fund is a part of a global investment giant with a footprint in over a dozen countries. In India, it has gained investor trust through solid performance and thorough research practices.
- Notable Scheme: Mirae Asset Large Cap Fund – a top pick for those seeking steady long-term returns in the large-cap segment.
4. Baroda BNP Paribas Mutual Fund
- Created Through Merger: March 2022
- Sponsors: Bank of Baroda and BNP Paribas Asset Management
- About: This AMC is a fusion of Indian banking strength and European asset management expertise, offering diversified solutions across asset classes.
- Notable Scheme: Baroda BNP Paribas Large Cap Fund – known for delivering impressive long- and mid-term returns.
5. Edelweiss Mutual Fund
- Founded: 2008
- Sponsor: Edelweiss Financial Services Ltd.
- About: Part of the Edelweiss Group, this AMC stands out for its innovation-driven investment strategies and use of data analytics to manage portfolios.
- Notable Scheme: Edelweiss Large Cap Fund – appreciated for its focused strategy and rising popularity based on recent performance.
Factors to Keep in Mind Before Investing in Large Cap Mutual Funds
- Define Your Objectives: Clarify whether your aim is long-term growth, capital protection, or compounding returns over time.
- Investment Duration: A holding period of at least 5 years is recommended for optimal results.
- Assess Risk Appetite: While large cap funds are generally more stable than mid- or small-cap funds, they are still subject to market volatility.
- Evaluate Performance Consistency: Choose funds that have delivered steady returns across various market phases.
- Consider Costs: A lower expense ratio can make a noticeable difference to your returns over the long term.
Who Should Consider Investing in Large Cap Mutual Funds?
- Investors Seeking Exposure to India’s Leading Companies
Large cap mutual funds invest in top-tier, well-established companies that dominate their sectors. By investing in these funds, you gain partial ownership in some of the most reputable and successful businesses in India. - Those Looking for Relatively Stable Returns
Since these funds focus on financially strong, large-scale companies with solid business models and market presence, they tend to be less volatile than mid- and small-cap mutual funds, making them ideal for investors seeking equity growth with lower risk. - Investors Building a Strong Core Portfolio
Large cap mutual funds are well-suited as the foundation of a diversified investment portfolio. Although they may not outperform during bull markets, they can still deliver consistent double-digit returns with less price fluctuation over time.
Taxation Rules for Large cap Mutual FundsTop of Form
Large cap mutual funds are taxed similarly to other equity-oriented investments. If you sell your units within one year, the profits are treated as short-term capital gains (STCG) and taxed at 20%.
For investments held longer than a year, the gains fall under long-term capital gains (LTCG). Currently, LTCG up to ₹1.25 lakh per financial year is tax-free, while any amount above that is taxed at 12.5%.
How to Invest in Large Cap Mutual Funds?
Investing in large cap mutual funds through the ET Money app is quick and convenient. Here’s how to do it:
For Desktop Users:
- Click on the “Invest” button beside your chosen large cap mutual fund from the list.
- Scan the QR code to download the ET Money app.
For Mobile Users:
- Tap the “Invest” button next to the desired fund to get the app.
- Open the app, sign up, and complete your one-time KYC, or log in if already registered.
- Search for your preferred fund and select your investment option—either lump sum or SIP.
- Enter the amount, provide your bank details, and confirm the transaction.
Final Thoughts
In 2025, large cap mutual funds remain a wise option for investors aiming for growth with moderate risk. Backed by India’s projected GDP growth of over 6.5% and the strong performance of leading companies in sectors like banking, IT, FMCG, and infrastructure, these funds provide a stable core for equity portfolios.
However, it’s essential to review each fund’s factsheet, evaluate past performance, and ensure the investment aligns with your long-term financial objectives before making a decision.
