As the market is in turmoil due to coronavirus, mutual fund advisors have been asking their clients to stick to large-cap mutual funds as only the companies with very large pockets will be able to withstand these hard times.
Before knowing about which funds to invest in, here are some facts you must know about large-cap mutual funds –
- Large-cap funds are recommended mostly to equity investors looking to create wealth with much less volatility.
- According to SEBI rules, 80% corpus in large-cap funds is to be invested in the top 100 companies by market capitalization.
- These companies are leaders in their respective fields.
These facts make these companies more stable in the time of turbulences as Coronavirus than their smaller counterparts, which lack deep pockets to survive.
This is why your investor might be telling you to put your money in large-cap funds. Large-cap stocks mostly fare better than mid-cap and small-cap stocks in times of a market correction. Mutual fund advisors believe that large-cap funds will bounce back well once the market rallies back to normal.
Recommendations before you invest in large-cap funds –
- Always invest in large-cap funds keeping the horizon of your investment minimum to 5-7 years.
- It is best for your long term goals, never make the mistake of taking out your investment in a year or two unless in an emergency.
Though many large-cap funds have also been hit hard in the wave of Corona Virus history of large-cap fund assures us to stick in the hard times. HDFC Top 100 Fund is in the fourth quartile for three successive months. The scheme was in the third quartile before that. ICICI Prudential Bluechip Fund is in the third quartile for three successive months. Nippon India Large Cap Fund is also in the fourth quartile this month. The scheme was in the third quartile in the last month as well.
Best large-cap mutual funds to invest in 2020
- Axis Bluechip Fund
- ICICI Prudential Bluechip Fund
- Nippon India Large Cap Fund
- Canara Robeco Bluechip Equity Fund
- HDFC Top 100 Fund
- Mirae Asset Largecap Fund
Happy Investing!
A mutual fund is subject to market risk please read offer related document carefully before investing.