Investing in mutual funds is now very much in trend as people know the importance of savings through it. However, there is time to reach a state where every investor will be well-informed and make healthy decisions. With this, probably the problem of disequilibrium might also get reduced to a good extent. This article will help you to know some of the crucial facts about the large cap mutual funds. But, before that, let’s take a quick brief on its meaning.
What Are Large Cap Mutual Funds?
Large Cap Funds are the schemes which predominantly invest in the stocks of large and giant companies to gain healthy returns from the wide operations of the entities. The large cap schemes are generally less volatile because the large companies are mostly the leaders in the industry, and they do not get affected by frequent market fluctuations. These stocks help the investors to reap steady returns, but the scope of high growth is comparatively lower than the peers. Although most people think that these plans solely invest in the shares of large companies as the name suggests, it is not the reality. These funds allocate the major portion of the capital in the stocks of the big companies to justify the categories, and the rest of the assets are allocated in the other lower asset class stocks.
Should I Invest in a Large Cap Fund?
The large cap funds are known for their nature of investing and providing stabilised returns to the investors. People invest in these to attain an assurance of returns which they feel the well-established brands can provide. The expert consultants mostly suggest these funds to the one who is conservative in nature and willing to travel through a safe investment journey toward the achievement of a long-term financial goal. Therefore, if you too want to travel safely in your equity investments, you must invest in the funds from the large cap category.
How to Choose the Best Large Cap Fund?
Many investors fail to choose the best large cap mutual funds because of having inadequate information. If you do not want to commit the mistake of selecting the wrong fund, then you must be aware of this fact that how large cap funds are categorised as per their investment style. Generally, these schemes are distinct in nature of investment as some invest aggressively in the stocks of the large companies while some allocate the capital in the mix of asset class, i.e., midcap, small cap, and large cap. The latter one mostly targets to beat the benchmark and category in which there is a risk of failure, while the former one offers stability which is the primary motive of a large cap fund. Therefore, if you are willing to invest to attain stability, then research well and select the one that majorly invests in the large companies.
Here are the top two large cap mutual funds which are also recommended by the expert financial planners:
- SBI Blue Chip Fund: It is one of the best schemes in the space of large cap funds. It has managed to offer 18.94% returns to the investors in the past five years as on October 27, 2017. It is recommended by the financial consultants for the investors who wish to attain stability in returns in the long run.
- Tata Equity Opportunities Fund: For the investors who want to invest in a bit aggressive mode under the label of the large cap fund, this scheme is one of the best choices. It spreads its total assets into stocks of various companies of different sizes. Thus, it comes in the category of multi-caps under large cap funds. Its five-years returns was tracked at 18.08% as on October 27, 2017.
However, there are many other schemes under this category which can be suitable for you as per your investment objectives. Choose the one which offers maximum benefits to you.
In this article, you will come to know about the importance of investing in large cap mutual funds, and also how to choose the best large cap fund.