The stock market has become volatile lately. If you are a conservative investor looking for equity mutual fund schemes to achieve your long-term goals, you should consider investing in large cap mutual funds. However, before that you should acquaint yourself with large cap mutual funds and the prevailing conditions in the stock market.

First, large cap mutual funds are mandated to invest in top 100 companies by market capitalisation. These large companies fare better in a volatile market as these companies may be market leaders and resilient to downturns. That is why if you are looking for a relatively safer mutual fund category, you should consider investing in large cap funds.

Many equity investors are concerned about increasing volatility and uncertainties in the market. Such investors can consider investing in large cap mutual funds. Large cap schemes or any equity mutual fund category can’t totally avoid volatility. However, large cap schemes fare better in a volatile market.

Many investors and mutual fund analysts believe that large cap schemes are losing their mojo lately. Ever since SEBI introduced total variable benchmark indices and stricter investment norms, these schemes have been struggling to beat their benchmarks. Worse, most large cap schemes have been lagging behind their passive counterparts – index schemes and ETFs- in the last three years.

However, writing off large cap schemes for this reason alone could be a mistake. It is true that new benchmarks and stricter investment norms have made life difficult for these schemes. However, you still can’t ignore large cap schemes. If you are not happy that you are missing out on one or two per cent valuable returns over a long period, you can invest in large cap index schemes. But the trouble is many investors are not comfortable investing in index schemes.

Investing in other mutual fund categories unmindful of your risk profile could be a costly mistake. If you are happy with 10-12% returns offered by large cap mutual funds over a long period, you should invest in them. If you want to match the market returns, you may educate yourself about index schemes and invest in a large cap index scheme.

If you are interested in investing in large cap mutual funds to take care of your long-term financial goals, here are our recommended large cap schemes. You may invest in these schemes with a minimum investment horizon of five to seven years. Look out for our monthly updates where we keep discussing the performance of these schemes. We typically come up with our updates in the first or second week of every month.

However, here are a few things you should keep in mind. One, large cap mutual funds are recommended to conservative equity investors looking to create wealth over a long period without exposing themselves to a lot of risk and volatility. However, do not assume that these schemes do not have any risk or they will not face volatility.

There is no change in the list this month. However, BNP Paribas Large Cap Fund, one of the recommended schemes, has been in the third quartile for four months. Axis Bluechip Fund has been in the fourth quartile for four months. Canara Robeco Bluechip Fund was in the third quartile in the last two months.

Best large cap mutual funds to invest in 2023:

• Axis Bluechip Fund
• Canara Robeco Bluechip Equity Fund
• Mirae Asset Large Cap Fund
• BNP Paribas Large Cap Fund
• Edelweiss Large Cap Fund

Here is our methodology:
ETMutualFunds has employed the following parameters for shortlisting the equity mutual fund schemes.

1. Mean rolling returns: Rolled daily for the last three years.

2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H…. Read More

Source By: economictimes

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