Investment Vehicles in Broad Market Securities (Mutual Funds focusing on Major Companies)
In the realm of equity investments, large-cap mutual funds stand out as a relatively safer and steady option for investors. These funds, managed by professional fund managers, are known for their ability to withstand bear markets and offer a balance between risk and return.
For those seeking high returns, the top-performing large-cap mutual funds over the last three years include the Nippon India Large Cap Fund Direct-Growth (22.78%), ICICI Prudential Large Cap Fund Direct-Growth (20.90%), HDFC Large Cap Fund Direct-Growth (19.50%), Invesco India Largecap Fund Direct-Growth (20.49%), and Aditya Birla Sun Life Large Cap Direct Fund-Growth (18.41%).
Looking beyond the current landscape, the top-performing large-cap funds over the last five years tend to be those with active management focused on quality, growth, and dividend growth stocks. Notable examples include the Lord Abbett Total Return Fund (LTRAX) and the Lord Abbett Dividend Growth Fund (LAMAX).
The Lord Abbett Total Return Fund has demonstrated above-average returns with below-average risk across different market conditions, as of mid-2025. On the other hand, the Lord Abbett Dividend Growth Fund focuses on large U.S. companies with a history of dividend growth, with holdings like Microsoft, NVIDIA, and JPMorgan Chase, indicating a core large-cap equity focus.
Recent insights from the BlackRock Investment Institute suggest that top-performing U.S. large-cap equity fund managers have delivered more alpha (excess returns above benchmarks) since 2020, indicating that skillful active management has been rewarded recently. Furthermore, factor-based indices like the S&P 500 Pure Growth and Quality indices have shown varied but strong returns, which large-cap funds tracking or overweight in such factors might benefit from.
Investing in large-cap mutual funds can be done online by registering, choosing the fund, clicking on invest, choosing the amount and mode of investment, providing KYC details, and completing the investment. For those who wish to start with a smaller investment, it's possible to invest in large-cap mutual funds with as little as ₹500 per month through Systematic Investment Plans (SIPs).
Gains from large-cap equity mutual funds held for less than 12 months are taxed at 15%, while those held for more than 12 months are taxed at 10%.
In summary, leading large-cap funds in recent years tend to be those with active management focused on quality, growth, and dividend growth stocks, exemplified by funds like Lord Abbett's Total Return Fund and Dividend Growth Fund, supported by broader insights on alpha generation by top managers from BlackRock.
- Equity funds like the Lord Abbett Total Return Fund and Dividend Growth Fund, which are large-cap mutual funds, have been top performers due to their focus on quality, growth, and dividend growth stocks.
- For those interested in investing in large-cap mutual funds, they can do so online by following the steps of registration, fund selection, investment, and providing KYC details.
- Capital gains from large-cap equity mutual funds are taxed differently based on the holding period: gains from funds held for less than 12 months are taxed at 15%, while gains from funds held for more than 12 months are taxed at 10%.
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