Saving your money is important in todays’ scenario. But another important skill to acquire when you deal with your money is to make your money work for you more than you work for money after a while. There are various methods by which you could do that. They are real estate investing, mutual funds, and stock market investing.
But the majority of the people think that investing their money in the stock is risky.
For the majority of the people who still believe in the myth of the risk in stock market, you could use this golden opportunity of investing in “Mutual Funds”
But what are these mutual funds?
A mutual fund is a company that brings together money from many people and invests it in stocks, bonds or other assets. The combined holdings of stocks, bonds or other assets the fund owns are known as its portfolio. Each investor in the fund owns shares, which represent a part of these holdings.
How do I invest in these mutual funds?
One can invest in Mutual Funds by submitting a duly completed application form along with a cheque or bank draft at the branch office or designated Investor Service Centers (ISC) of Mutual Funds or Registrar & Transfer Agents of the respective Mutual Funds.
One may also choose to invest online through the websites of the respective Mutual Funds.
Further, one may invest with the help of / through a financial intermediary i.e., a Mutual Fund Distributor registered with AMFI OR choose to invest directly i.e., without involving or routing the investment through any distributor.
A Mutual Fund Distributor may be an individual or a non-individual entity, such as a bank, brokering house or on-line distribution channel provider.
One can choose to invest online, as platforms these days have all necessary safeguards to ensure secure investing. There are many platforms and online brokerage firms that enables you to invest in mutual funds at ease without any tension and uttermost comfort level.
There are also many more on the list which helps you to invest in these firms and fetches you a sense of satisfaction and makes you feel safe and secure.
Also Read : What are Gilt Funds?
Large Cap Mutual funds
Long duration mutual funds are those which have the high ability and potential to give back the best returns on the investments made by the customer. These long duration mutual funds provide great dividends for their investors
Large Cap funds are the funds that invest a major proportion of their assets under management (AUM) in equity shares of companies with a large market capitalization, such as Britannia ITC, HUL, and more. These companies that fall under this bracket are known to have a high reputation in the market. With the best Large Cap funds, you can be assured that you are investing in companies that have an excellent track record of performing well in the medium to long term horizon.
When contrasted with small-cap and mid-cap funds, these funds tend to pose a lesser risk and might be perfect for risk averse investors
BEST LARGE CAP FUNDS
Large-cap mutual funds are those that invest at least 80 per cent of the corpus in top 100 companies by market capitalisation. Best large cap funds are the top rated large cap funds giving good returns.
- These companies are generally the leaders in their field of businesses
- Provide stable returns & have better potential to withstand economic turmoil
- Suitable for less aggressive investors who want to create wealth without taking too much of risk or exposing their corpus to a lot of volatility
- Gains on equity funds are subject to taxation @ 15% for holding period less than 1 year and @ 10% for more than a year if gains are more than 1 lakh
Here is the list of top 10 such long term funds:
- Axis Bluechip Fund
- Mirae Asset Large Cap Fund
- Parag Parikh Long Term Equity Fund
- UTI Flexi Cap Fund
- Axis Midcap Fund
- Kotak Emerging Equity Fund
- Axis Small Cap Fund
- SBI Small Cap Fund
- SBI Equity Hybrid Fund
- Mirae Asset Hybrid Equity Fund
Working of large cap mutual funds
Large-cap equity funds invest a considerable part of its portfolio in companies grouped under large market capitalisation. Large-cap companies are well-established players with a good track record and vintage, and they typically have stable corporate governance practices. These corporate houses are always among the most highly followed in the market. They have generated wealth for their investors slowly and steadily over the long term.
Recently, SEBI’s re-categorisation has modified the criterion to determine whether a company is large-cap, small-cap, or mid-cap. Large-cap companies are those that fall in the top 100 ranks of the given benchmark. As compared to small-cap and mid-cap funds, these funds are less risky and may be ideal for relatively risk-averse investors. Being patient and having a long-term horizon may be a preferable investment strategy for large-cap funds.
Are these large cap mutual funds safe ?
Large Cap funds are a safer way to invest in the stock market because they are known to weather bear markets. Large Cap funds can provide sound and consistent returns if you have a long enough investing horizon.
Is it good to invest in these large cap mutual funds?
Large Cap Funds are ideal for investors who are looking for steady returns with relatively lower risk. These funds rely upon the horizon of your investment. To make the best out of these funds, it is recommended that you should invest in them for at least five to seven years. For investors with higher risk appetite, are better off by investing in Mid-cap or Small-cap funds
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