Large-cap funds: Keeping up the edge

Large-cap funds primarily invest in the top 100 companies by market capitalisation, which together account for over 65 per cent of the total market cap at a combined market value of Rs 266 lakh crore. These market leaders are known for their stability and ability to weather market volatility better than others. In the past five years, only 26 per cent of these large caps exited their index, compared to 31 per cent for mid caps and 44 per cent for small caps. Ideal for conservative investors, these funds offer a steady path to long-term wealth creation while keeping volatility at bay. Performance: Active large-cap funds outperformed the BSE 100 TRI for the second consecutive year in 2024, delivering 16 per cent returns compared to the index's nearly 14 per cent gain. Most of the category's gains came in the first half of the year with the median fund handily beating the index by 2.2 per cent in the first half. In the second half, while the index yielded a negative 0.79 per cent, an active median fund delivered 1.2 per cent. Higher allocation to mid-and small-cap stocks partially helped this outperformance. Investor traction: Active large-cap funds bounced back with net inflows of over Rs 17,000 crore in 2024 after outflows of nearly Rs 3,000 crore the previous year. However, their passive counterparts attracted higher inflows of over Rs 24,000 crore in 2024. New kids on the block: 21 large-cap funds were launched in 2024, raising Rs 4,600 crore. Only two of these, Bajaj Finserv Large Cap Fund and Motilal Oswal Large Cap Fund, are actively managed. Category snapshot Parameters 2024 Number of funds that managed to outperform the index 25 Total number of actively-managed funds 33 Total assets managed Rs 3.64 lakh crore Asset-weighted expense 0.80% Average expenses - Index funds 0.27% Asset-weighted category returns 16.19% BSE 100 TRI returns 13.83% Average return of top quartile funds 19.01% Average return of bottom quartile funds 14.39% Average mid & small-cap exposure 8.24% 3 most popular funds Nippon, ICICI, Quant 3 least popular funds Aditya Birla, Mirae, Axis Note: Returns are as of December 27, 2024. Expense and portfolio-level attributes are as of November 30, 2024. Popular funds are based on net flows up to December 27, 2024. Suggested read: Active large-cap funds: Top bigwigs Changes in recommendation Funds moved to 'Buy': Nippon India Large Cap (Best Buy), Invesco India Largecap Fund moved to 'Hold': Bank of India Bluechip , JM Large Cap , Mirae Asset Large Cap Funds moved to 'Sell': PGIM India Large Cap To get our opinion on passive large-cap funds, click here . Funds at a glance Scheme name Rating 5Y SIP returns (%) Risk grade Sharpe ratio (%) Avg. no. of stocks Expense ratio (%) Assets (Rs cr) BSE 100 TRI - 18.80 - - - - - ICICI Prudential Bluechip Fund 5 22.15 Low 0.85 69 0.87 63,670 SBI Bluechip Fund 3 18.73 Below Average 0.72 51