Nippon India Large Cap Fund on Thursday said its large-cap fund had crossed the ₹50,000 crore mark in assets under management (AUM), joining the ranks of ICICI Prudential and SBI, whose large-cap funds have AUMs of more than ₹50,000 crore despite the lower flows in equity mutual funds. Profit booking after the recent rally amid persisting uncertainties over an India-US tarde deal, concerns over valuations and relentless foreign capital outflow.
Large-cap mutual funds are often considered a relatively safer option for new and risk-averse investors, as they invest in blue-chip stocks. These companies have robust business models and are typically leaders in their respective sectors. Hence, large-cap funds tend to be more stable and resilient to economic downturns and market fluctuations, compared to mid and small-cap mutual funds.
Stable and consistent
Large-cap funds have given healthy returns over the last few years, even as the market has been on a volatile track.
Despite a confluence of domestic and global headwinds, large-cap mutual funds have offered relatively consistent and stable returns over the long term, along with potential regular dividends.
Experts highlight that the constituents of large-cap funds are widely traded on stock exchanges, which ensures high liquidity. This allows fund managers to trade on the go without causing major price fluctuations.
Since large-cap mutual funds invest across a wide range of established companies across sectors, these funds come with a built-in diversification, reducing the impact of a below-par performance in any single company or sector.
The Nippon India Large Cap Fund has delivered returns of 19% and 22% over the last three and five years, respectively. In the same period, ICICI Prudential Large Cap fund (18% and 19%) and Invesco India Large Cap gave returns of 17% and 18%.
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