The market experts believe that 2021 is going to be an incredible year for the market. Already on a high, Sensex is expected to reach 50,000 and Nifty at 15,000 by the end of this year. The indices will claim high records in 2021.
2020 was one of the most volatile years for the market due to the pandemic. The market saw evident years of bull and bear but ended up sustaining in the bull period.
Both BSE Sensex and Nifty 50 staged a smart recovery despite the national lockdown. The strong liquidity flow in the market ended up in gains for both the indices.
Sensex grew by 14.8% and Nifty 50 by 14%.
With the marketing flourishing, it is an excellent opportunity for investors to invest in the booming large-cap mutual funds.
What Are Mutual Funds?
Mutual funds are basically open-end funds that are professionally managed. They pool money from many investors together to purchase the securities.
Large-cap mutual funds are one of the safest investment options. According to SEBI, these funds invest a minimum of 80% of its assets in equity and related instruments of well-established and reputed large-cap companies.
They have reliable brand equity, competitive advantage, strong balance sheet, easy access to all the resources and a sustainable business model.
These companies mostly generate consistent profits and enjoy customer loyalty. This is what makes them capable of withstanding economic and financial shocks, and hence, are safe investment options.
Considering the risk-return parameters, the returns may not always be very high but are consistent. They help in containing the risk during a volatile market compared to their smaller peers.
Large-cap funds are suitable if you are looking to earn a stable growth of capital revenue over a long period of time. They are the safest funds in the equity category.
The top 8 performing large-cap mutual funds to invest in 2021 are –
Axis Bluechip Fund:
With a yearly return of 22.91%, the Axis Bluechip Fund aims to outperform the benchmark performance of mutual funds.
Even though it comes under a risky investment, they aim to keep the risk lower than the set benchmark. It holds unique assets with class benefits.
Along with that, they also hold the potential to beat inflation and generating long term revenue. Being one of the top mutual funds to invest in, it is the right choice for investors to achieve their targeted financial goals for the year 2021.
The minimum systematic investment plan (SIP) for Axis Bluechip is Rs. 500. It has a low expense ratio of 0.51%, revealing that fewer assets are used for administrative and operating expenses.
Below is the growth chart of Axis Bluechip Fund from moneycontrol.com.
Kotak Bluechip Fund:
With a yearly return of 25.28% and an expense ratio of 0.96%, Kotak Bluechip Fund is considered a safe investment that can endure economic downturns. Their 3 year and 5-year returns are higher than the category average returns, making it a sound investment option.
This fund has a minimum SIP of Rs. 100. To make things simpler and more understandable, considering the return rate of 25.28%, Rs. 100 invested every month last year would yield Rs. 1,333 today.
98% of Kotak Bluechip’s holding is in assets, and the remaining in cash – HDFC Bank Ltd., Infosys, and Reliance being the top 3 holdings.
Below is the growth chart of Kotak Bluechip Fund from Coin by Zerodha.
SBI Bluechip Fund:
Yielding a yearly return of 27.52%, the SBI Bluechip fund has a fund size of Rs. 25,925 Cr.
It is one of the star funds in the large-cap mutual fund’s category, giving fantastic long term investment opportunities and returns.
The expense ratio for SBI Bluechip Fund is 1.03%, and the minimum SIP is Rs. 500. The fund has 99.6% of its holding in equity, with HDFC Bank Ltd., ICICI, and Infosys being the top ones.
Below is the growth chart of the SBI Bluechip Fund from Coin by Zerodha.
ICICI Prudential Bluechip Fund:
ICICI Prudential Bluechip Funds is one of the consistent performers in the large-cap mutual fund category. With an enormous fund size of Rs. 26, 541 Cr., the yearly returns of the same are 24.36%.
The fund has managed to beat the benchmark in the long term. It has offered 21% against 16% of the standard in 5 years. And has also provided 18% against 11% of that in 10 years.
The expense ratio is not too high either, standing at 1.22%. However, their investment breakup involves 1.1% debt, 3.5% cash, and 95.4% equity. The top holdings are HDFC Bank Ltd., Infosys, and ICICI Bank Ltd.
The minimum SIP amount is Rs. 100, with the fund manager following attractive valuations.
Considering the above, it is one of the best investment options for 2021.
Below is the growth chart of ICICI Prudential Bluechip Fund from Coin by Zerodha.
Canara Robeco Bluechip Fund:
With an annual return of 30.17%, it is a moderate risk, long term investment option.
As their 1 year, 3 year, and 5-year returns are higher than the category average returns; it has a high future potential gain.
Canara Robeco Bluechip Fund has performed better than the benchmark and is an ideal investment for 3+ years’ timeline, to witness superior growth.
They have a low expense ratio of 0.66% and are indeed an emerging equities fund. The minimum SIP amount for this mutual fund is Rs. 1,000, with 95.3% of their holding analysis dedicated to equity.
Their top 4 holdings are HDFB Bank, Infosys, ICICI Bank, and Reliance Industries.
Below is the growth chart of Canara Robeco Bluechip Fund from Coin by Zerodha.
Mirae Asset Large Cap Fund:
With a 24.80% one-year return, Mirae Asset Large Cap Fund is one of the top-ranked mutual fund schemes in India.
They are a rare outperformer and have managed to deliver an outstanding risk-adjusted return over the years. They have performed better than the rest when compared to the benchmark of the large-cap category.
Over the last 1-year, 3-year and 5-year time periods, the scheme has managed to give 11.8%, 8.5 % and 13.4% returns, respectively.
Their expense ratio is also as low as 0.55%, generating 12.3%, 7.3% and 10.4%, respectively, in 1, 3, and 5 years.
Below is the growth chart of Mirae Asset Large Cap Fund from moneycontrol.com.
BNP Paribas Large Cap Fund:
With an annual return of 23.94%, BNP Paribas Large Cap Fund has an above-average performance considering returns, risk, and consistency.
They have an expense ratio of 1.03% and a minimum SIP amount of Rs. 300. Some of BNP Paribas’ top holdings are HDFC Bank, ICICI Bank, Infosys, Reliance Industries, Kotak Mahindra Bank, Bharti Airtel, TCS and Hindustan Unilever.
If you are an investor looking for high returns by investing your money for 3-4 years minimum, this is a suitable option for you.
This large-cap mutual fund’s average return is spotted at 22.94% against the category average at 21.95% – making the investment a considerably right choice.
Below is the growth chart of BNP Paribas Large Cap Fund from Coin by Zerodha.
Edelweiss Large Cap Fund:
With an investment strategy of picking reasonably priced stocks with above-average returns, Edelweiss Large Cap Funds provide an annual return of 24.98%.
Their minimum SIP amount is priced at Rs. 500 with an expense ratio of 1.05%.
Their top holdings include reputed companies like HDFC Bank, Bharti Airtel, Reliance Industries, ICICI Bank, Infosys, SBI, Axis Bank, and companies that come under the top 100 listed companies in India by market capitalization.
You should invest in this mutual fund if you are looking at wealth creation over a long period of 5 years and above.
Their sector-wise portfolio analysis shows that most of their holdings belong to financial services companies, IT companies, the Pharma industry, and consumer goods. All these industries are positively booming ones, making the mutual fund an excellent choice to invest in.
Below is the growth chart of Edelweiss Large Cap Fund from Coin by Zerodha.
The funds mentioned above are the best choice if you are looking to invest in mutual funds in the year 2021.
However, it would be best if you remember that you do not pick large-cap funds by looking at the short-term market outlook, ignoring your asset allocation, relaying blinding on the star ratings, depending only on the past records of the MF, disregarding qualitative aspects of the mutual fund and relying heavily on the advice by family and friends.
Ensure that you make your own decision after conducting extensive research about the particular mutual fund you want to invest in.
Even though mutual funds are considered a safe choice, they are volatile and can be risky, too.
Make a choice only when you are a hundred percent sure about the MF you want to invest in, after considering all the qualitative and quantitative aspects of the same.