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Large-cap Winners

Six funds that have not got carried away by the mid-cap mania, and yet have done well to stay above the category average returns

With so many new funds coming up so often, it seems that the entire mutual fund landscape is changing into exotica. Opportunities, multi-cap, dividend yields, etc have suddenly become more popular and the core, no-frills fund is getting lost in the crowd these days. The job of finding a good, large-cap dominated diversified equity fund, to form the core holding of one's portfolio in the long run, has become quite difficult. If you are looking for a large-cap fund for your portfolio, then your search should end here as Mutual Fund Insight pulls out the funds that have not got carried away by the mid-cap mania, and yet have done well to stay above the category average returns.

We searched for those diversified equity funds which figure in the top half based on their trailing three-year returns, and have allocated at least 60 per cent of their assets to large-cap stocks on an average every year since 2001. For 2005, the average exposure to large-caps during the first six months is taken into consideration.

There are two reasons why we believe that these are good large-cap funds. First, if a fund didn't get tempted by the mid-caps in recent times, then we see little reason why it would compromise on its large-cap orientation in future as well. Second, with a large-cap heavy portfolio, the fund must have done well to remain in the top half of the category over the last three years, a time when mid-caps have been firing from all cylinders. The following six funds made it to our list.

DSPML Opportunities: While looking for opportunities in industries that are expected to do well, the fund does not compromise on its large-cap orientation. However, the fund takes sectoral bets at times, which makes it a little aggressive.

Franklin India Bluechip: A 27.53 per cent annualised return since its launch in 1993 speaks loads about the fund's ability to perform. Though the fund has dropped down just a bit in the recent perfromance charts, that doesn't prevent it from still being one of the top picks in the category.

Franklin India Prima Plus: The fund adds a pinch of mid-cap flavour to the large cap dominated portfolio. Over the years, the fund has efficiently managed its mid-cap exposure to generate returns for its investors, while still being large-cap dominated.

HDFC Top 200: With a focus on companies mainly drawn from the BSE 200 index, the fund merits consideration in any large-cap bluechip dominated portfolio.

Kotak 30: This fund restricts its investment to nearly 30 stocks. It has always maintained a large-cap portfolio thus making it one of the least volatile funds in the category.

Principal Growth: With the allocation to large-caps just about averaging 60 per cent for the six month period of 2005, the fund made it to our list on a very narrow margin. After a poor show in 2003, this fund made a smart comeback last year to deliver top-quartile returns.