Who should invest in a large-cap fund?

Summary: Looking for a steady start to equity investing? Large-cap funds offer stability, consistency and peace of mind. This article explains how they’ve performed and why they could be the right fit for your core portfolio, especially if you’re in it for the long haul. When you’re just beginning your mutual fund journey, the big question always comes up: Where do I start? For many investors, the answer often points to large-cap funds. And honestly, it’s not without reason. What are large-cap funds? Large-cap mutual funds put your money in the top 100 listed companies in India by market capitalisation. Think Reliance Industries, HDFC Bank, Infosys or ITC. These are not fly-by-night players. They’re businesses with strong balance sheets, reliable earnings and long track records. By SEBI’s mandate, at least 80 per cent of a large-cap fund’s portfolio must sit in these top 100 companies. That rule itself adds a layer of relative stability, unlike mid- or small-cap funds that swing more wildly. How have large-cap funds performed? Over the long term, large-cap funds have delivered respectable returns. In the last 10 years, they’ve clocked an average annual return of 12.6 per cent. However, there's a twist when it comes to actively managed large-cap funds. These funds aim to beat th

This article was originally published on August 23, 2025.