These large cap funds gave over 40% return in past 1 year. Should you invest? (2024)
Prior to investing in a mutual fund scheme, investors often examine the returns given by a scheme within a given time frame and compare the same with the corresponding schemes in the same category launched by other fund houses.
Typically, the schemes offering highest returns tend to draw a large number of investors, thus mounting the pressure on fund managers to continue to deliver high performance. Sometimes, the pace continues, whereas in some cases, it does not.
So, one should not assume that the historical returns of a mutual fund scheme will continue in the future as well.
Large cap mutual funds refer to the schemes, which invest a minimum of 80 percent of assets in large cap stocks, as per the Sebi’s categorisation of mutual funds. And large cap stocks are the securities of those companies which are positioned between 1 to 100 when ranked as per market capitalisation.
Here we select the top-performing large cap mutual funds which have delivered over 40 percent return in the past one year.
However, it is important to note that the past returns do not guarantee a scheme’s future returns. So, one must keep in mind an array of factors before deciding to invest in a scheme.
These include the category of scheme, reputation of the fund house, overall macroeconomic situation and importantly — investor's risk appetite, among others.
Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.
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The Rule of 40 states that if an SaaS company's revenue growth rate is added to its profit margin, the combined value should exceed 40%. In recent years, the 40% rule has gained widespread adoption as a popularized measure of growth by SaaS investors.
Large Cap should be a choice for those individuals who need to make good use of equity investments but don't need their returns to keep on fluctuating with time. Since large-cap funds are known to be financially stable, they are capable of withstanding bear markets.
Large-value stocks are often mature and stable companies that pay regular dividends, attractive to lower-risk value investors. Like all value stocks, however, investors should be wary of value traps and deteriorating financials being responsible for undervaluation.
The 80% Rule is a Market Profile concept and strategy. If the market opens (or moves outside of the value area ) and then moves back into the value area for two consecutive 30-min-bars, then the 80% rule states that there is a high probability of completely filling the value area.
However, the returns are lower compared to mid-cap or small-cap funds. In the long term (around five to seven years), these funds tend to offer good capital appreciation.
As an asset class, large-cap growth stocks offer relative stability, great capital appreciation potential and, in many cases, a good dividend income – all very attractive qualities to have in a long-term investment.
Investors frequently add large cap stocks to their portfolio as a hedge against riskier investments. Some examples of large cap stocks include Apple, Amazon, Wal-Mart Stores, and Exxon Mobile.
SBI Contra Fund, Nippon India Multi Cap Fund and Quant ELSS Tax Saver Fund gave 31.68%, 31.19%, and 19.94% returns respectively. The other funds in the list were Tata Small Cap Fund, Bandhan Small Cap Fund, HDFC Mid Cap Opportunities Fund, and Canara Robeco Small Cap Fund.
Gold mutual funds have shown strong performance; some have delivered over 20% return in the past 6 months. SBI Gold gave over 24% return and Quantum Gold Saving Fund gave over 23% return in the same period.
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