Around 67% large cap mutual funds have managed to beat their respective benchmarks in 2024 so far, an analysis by ETMutualFunds showed. Out of 30 large cap schemes, 20 schemes have managed to outperform their respective benchmarks. In other words, 10 large cap schemes failed to beat their respective benchmarks.
Out of 30 large cap schemes, 5 schemes offered double-digit returns. Quant Large Cap Fund, the topper in the large cap category, gave 14.51% against 6.71% by its benchmark (Nifty 100 – TRI). Baroda BNP Paribas Large Cap Fund gave 11.37% against 6.71% by its benchmark (Nifty 100 – TRI). Taurus Large Cap Fund which gave 10.88% compared to 6.04% by its benchmark (S&P BSE 100 – TRI).
Aditya Birla SL Frontline Equity Fund, the largest scheme in the large cap category based on assets managed, gave 6.37% in 2024 so far. Franklin India Bluechip Fund gave 6.37%. SBI BlueChip Fund gave 4.15%.
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Wondering what led to this performance by large cap schemes this year? What is the way forward for large cap schemes? “Looking at the expensive valuations and the run up in mid & small caps I am currently very positive towards the large cap space as their valuations have been quite reasonable, large caps have also underperformed mid & small cap over 3-5 years so mean reversion of large caps will happen sooner or later. Thus making large cap a sweet spot for investments in today’s market,” said Rushabh Desai, founder, Rupee With Rushabh Investment Services, based in Mumbai.
He added, “Also, growth strategy has underperformed value over the past 3 years making this strategy a lucrative bet today.”
Large cap schemes have struggled a lot to beat their respective benchmarks since Sebi introduced total return index (TRI) in February 2018. Large cap schemes are benchmarked against Nifty 100 – TRI and S&P BSE 100 – TRI. These schemes offered 6.71% and 6.04% returns in 2024 so far.
ETMutualFunds also analysed the performance of large cap schemes in 2023 and found the percentage of outperformance to be the same as that in 2024. In 2023, around 67% large cap schemes managed to beat their respective benchmarks. Out of 30 large cap schemes, 20 schemes managed to outperform their benchmarks.
Seeing this performance by the large cap schemes, should investors make investments in these schemes at the current point of time? “If investors want to make any lumpsum investments today then large cap index funds and growth oriented flexi cap funds tilted towards large caps are the products where I see good upside opportunity down the line. BUT investors should keep in mind to stick with their asset allocation at all times and not stop their SIPs including in mid & small caps even in the current market scenario,” recommends Rushabh.
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Note, all regular and growth option schemes were considered for the study. We calculated a return from January to April 2024.
Large cap schemes are recommended to conservative investors looking for equity mutual fund schemes to achieve your long-term goals. These schemes 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. This makes these schemes relatively less risky and volatile.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
