What are Large Cap Funds?
Large Cap Mutual Funds are open-ended equity schemes, which primarily invest in large cap companies. These funds have to invest at least 80% of their total assets in equity and equity related instruments of large cap companies. According to SEBI, top 100 companies in terms of full market capitalisation are categorized as large cap companies.
Why Invest in Large Cap Funds?
- Large cap stocks tend to be less volatile than mid cap and small cap stocks, which leads large cap funds to deliver more stable returns than mid cap and small cap funds
- Large cap funds are free to invest across sectors, styles & themes, which allows these funds wider spectrum of investment opportunities than sectoral or thematic funds
- Being invested in large cap companies, these funds have investment exposure to sector leaders with strong pricing power.
- The relative stability provided by large cap funds makes them an excellent choice for building one’s core investment portfolio and steady wealth creation
- Large cap funds are likely to face lower drawdowns or value erosion than mid cap, small cap or ‘large & midcap’ funds during bearish market conditions
- Large cap funds usually tend to recover faster than small cap or midcap funds from steep market corrections or bearish market conditions
Top 10 Large Cap Mutual Funds
| Fund Name | Returns (% p.a.) | |||
| 1 year | 3 year | 5 year | 10 year | |
| Nippon India Large Cap Fund | 4.93 | 19.96 | 25.03 | 14.79 |
| ICICI Prudential Large Cap Fund | 4.40 | 18.26 | 22.14 | 14.72 |
| DSP Large Cap Fund | 4.18 | 17.86 | 19.45 | 11.87 |
| Invesco India Largecap Fund | 2.56 | 17.11 | 20.44 | 14.02 |
| Bandhan Large Cap Fund | 3.32 | 16.50 | 19.37 | 13.54 |
| JM Large Cap Fund | -5.89 | 16.33 | 17.98 | 11.76 |
| Baroda BNP Paribas Large Cap Fund | -1.56 | 16.32 | 19.69 | 13.43 |
| Edelweiss Large Cap Fund | 0.72 | 16.26 | 19.82 | 13.53 |
| HDFC Large Cap Fund | -0.25 | 16.22 | 21.44 | 13.11 |
| Canara Robeco Large Cap Fund | 4.62 | 15.99 | 19.54 | 14.51 |
Data as on August 18, 2025
Risks of Investing in Large Cap Funds
- Despite their lower volatility, large cap funds can still generate negative returns depending on the market performance of their portfolio constituents and overall market conditions
- Macroeconomic factors like domestic or geo-political uncertainties, changes in taxation, adverse regulatory or policy changes, or industry specific factors like deteriorating demand supply conditions, increased competition, rising cost of capital, etc. can adversely impact the performance of the large cap companies in which the large cap schemes are invested in
- As mid cap and small cap companies offer higher growth potential than large cap companies, large cap funds often deliver lower returns than small cap and mid cap funds during periods of steep economic expansion
Who Should Invest in Large Cap Funds
- Large cap funds are suitable for investors seeking investment exposure to large cap stocks due to their lower volatility, proven track record, stronger fundamentals and consistent long term returns
- These funds also provide diversification for investors seeking to invest their funds across various themes and sectors
- The relative stability of large cap funds makes them a good option for first-time or relatively new equity market investors
- Large cap funds are also suitable for those who do not seek to chase the highest possible returns at all times
16 Comments
i want to create my portfolio with 3 funds in large category started with 5000 per month sip , pls suggest me to better funds who is performing in 2021.
Hi Arpit,
You can consider the top 3 funds mentioned in the table on the basis of their last 5 year returns .
I would like to invest rs 15000/pm in mutual fund via SIP, could you please advise fund name and distribution.
Hi SK Singh,
A more detailed description of your financial goals, exisiting investments and the investment horizons of your financial goals is required for suggesting funds to you. Assuming that you are planning to remain invested for the long term and you have already made sufficient allocation for your emergency fund and short-term financial goals, I will suggest you to start by investing Rs 5,000 per fund in the top 3 large cap funds mentioned in the table as per their last 5 year returns.
Hi, I’m new to mutual fund investments. I want to invest upto 50k in large cap mutual funds (around 2-3 funds) and 50k in multi cap (around 2-3 funds) per month in SIP for 5 years. My goal is to earn 1 crores in 5 years. Can you please suggest how to go about the investment?
Creating a mutual fund corpus of Rs 1 crore with just Rs 1 lakh per month seems to be difficult. Investing Rs 1 lakh per month in large cap and multicap funds for 5 years assuming an annualised return of 12% would create a corpus of Rs 81 lakh. Even assuming an annualised return of 15% from your mutual fund corpus would only create a corpus of Rs 88 lakh. Hence, I will suggest you to either increase your investment horizon to at least 6 years to create your desired corpus or increase your monthly SIP contribution to Rs 1.25 lakh assuming the same annualised return of 12%. Try to top-up your SIPs with lump sum investments in a staggered manner during steep market corrections like the one noticed during March and April this year. That can help you achieve your desired corpus sooner.
You can select the top 5 large cap funds from the table cited above based on their last 5 year returns. Click on https://www.paisabazaar.com/mutual-funds/best-multicap-funds/ to choose the best multicap funds.