scorecardresearchThis large-cap mutual fund has a massive edge over its peers. Details here

This large-cap mutual fund has a massive edge over its peers. Details here

Updated: 27 May 2022, 03:53 PM IST

If you are looking to earn returns in addition to capital appreciation, this fund may be right for you.

Investing in large-cap mutual funds.

Investing in large-cap mutual funds.

Stability is an important element that investors look for while parking their money in mutual funds. This explains why so many people invest in large-cap funds. Many large-cap mutual funds have given reasonable returns to their investors, thus, proving their mettle in the steady wealth creation process.

Take, for example, the Canara Robeco Bluechip Equity Fund - Direct Plan-Growth with an enviable fund size of 6718.31 crores. Like most other funds in its category, the risk factor in this fund is considerably high. This means that investments in this fund come under the “Very High Risk” category as per the guidelines stipulated by the Securities and Exchange Board of India (SEBI). You must stay invested in this fund for a prolonged period to earn good returns.

Canara Robeco Bluechip Equity Fund - Direct Plan-Growth

Launched on January 02, 2013, this blue-chip fund charges a 0.35 per cent expense ratio. The fund is benchmarked against the S&P BSE 100 Index and can be bought to earn long-term returns. Considering the low expense ratio charged by this fund, the returns from this debt to medium to the long-duration fund are a bit higher compared to other funds in this category.

The minimum amount you can invest in this fund is 5000 in a lump sum while you can make an added minimum investment of 1000 in a lump sum in this fund. The minimum investment you can make through SIPs is 1000. This fund does not attract any exit load, which means that investors have nothing to lose post-fund redemption.

Fund performance

Many investors inquire why they must invest in this fund more than any other. A comparative analysis of most income funds in this category underscores the exceptionally high returns that investors have earned by investing in it.

Scheme Name3-year Returns5-year Returns
Mirae Asset Large Cap Fund - Direct Plan-Growth12.39%12.56%
Edelweiss Large Cap Fund - Direct Plan-Growth12.45%12.41%
ICICI Prudential Bluechip Fund - Direct Plan-Growth12.91%12.21%
Kotak Bluechip Fund - Direct Plan-Growth13.80%12.01%
Baroda BNP Paribas Large Cap Fund - Direct Plan-Growth13.50%11.92%

Staying invested for a prolonged period yields returns exceeding most other bonds and government securities. This you can achieve by investing in this fund through systematic investment plans over a period ranging from 10 to 15 years.

Asset allocation

Roughly 95.20 per cent of the fund’s holdings are in Indian stocks. Of this, 75.61 per cent of the money is put in large-cap stocks while 7.04 per cent is invested in mid-cap stocks. With a major portion of the fund’s money parked in equity instruments, this fund is best suited for investors who want to park their money for a long duration, and do not mind taking risks inherent in equity funds.

The returns factor

The scheme earns around 14.92 per cent returns in five years while the absolute returns over the same period are 45.23 per cent. Since its inception, investors have earned 242.53 per cent absolute returns.

Tax treatment

If the units of this fund are redeemed within a year of investment, the gains from this fund are subject to short-term capital gain tax (STCG), i.e., 15 per cent.

Long-term investors redeeming their investments after one year will be exempted from tax on gains up to 1 lakh. More than 1 lakh gains would be subject to long-term capital gains tax, i.e., 10 per cent. There is no cess or surcharge on the funds sold before or after one year.

Disclaimer: Mutual funds are subject to market risks. Please read the offer document carefully before investing. Also, the Securities and Exchange Board of India has stipulated the latest guidelines categorising this fund under the “Moderate Risk” category.

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First Published: 27 May 2022, 03:36 PM IST