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Best large cap mutual funds to invest in 2019

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Best large cap mutual funds to invest in 2019

Large cap mutual fund schemes, as the name suggests, invest in stocks of very large companies or stocks with largest market capitalisation.

Heres the monthly update on our recommended large capmutual funds. There is no change in the recommendations this month. If you are a cautious investor and want to create wealth without too much risk and volatility, you should consider investing in large cap mutual fund schemes.

According toSebis new categorisation norms, largecap mutual fund schemes have a mandate to invest at least 80 per cent of the corpus in top 100 companies by market capitalisation.

These large companies may be leaders in their respective field and they may be relatively stable than smaller companies during a volatile phase in the market. That makes them ideal for investors who want to create wealth without taking extra risk or exposing their corpus to a lot of volatility.

Many mutual fund managers and advisors have been recommending large cap schemes for a while now. They believe that they are ideal to tide over uncertain times. No wonder, since large cap stocks are better placed than mid cap and small cap stocks to fare relatively better in times of a market correction.

As you can see, these factors make large cap schemes ideal for conservative equity mutual fund investors. If you have a low risk appetite and want to invest in stocks to create wealth over a long period, you have two options: investing in aggressive hybrid schemes (erstwhile balanced schemes or equity-oriented hybrid schemes) or large cap schemes.

Note, since these schemes are relatively less volatile, they also offer modest returns. So, it is important to have realistic return expectations while investing in large cap schemes. Also, you should remember that the ability of this category to generate considerable returns over their benchmarks is seriously contested after the re-categorisation. In fact, most actively-managed large cap schemes failed to beat their benchmark last year. Passively-managed schemes index schemes and ETFs fared better than them in the last year.

Here are our recommended large cap schemes. You may invest in these schemes with a minimum investment horizon of five to seven years to achieve your long-term financial goals. Look out for our monthly updates – so that you know whether your schemes are performing up to the mark. We usually come up with our updates in the first week of every month.

Here is our methodology:

< Mutual Funds has employed the following parameters for shortlisting the equity mutual fund schemes.

1.Mean rolling returns: Rolled daily for the last three years.

2.Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H.

i) When H = 0.5, the series of return is said to be a geometric Brownian time series. These type of time series is difficult to forecast.

ii) When H is less than 0.5, the series is said to be mean reverting.

iii) When H is greater than 0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series

3.Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure.

Z = Y/number of days taken for computing the ratio

4.Outperformance: It is measured by Jensens Alpha for the last three years. Jensens Alpha shows the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). Higher Alpha indicates that the portfolio performance has outstripped the returns predicted by the market.

[Risk Free Rate + Beta of the MF Scheme * (Average return of the index – Risk Free Rate

5.Asset size: For Equity funds, the threshold asset size is Rs 50 crore

(%)Mirae Asset Tax Saver Direct-G1.569.879.0111.6921.50Invest NowMirae Asset Tax Saver Reg-G1.379.358.0410.0419.85Invest NowMotilal Oswal Long Term Equity Fund Direct-Growth

ELSS1.197.854.91-3.4716.25Invest NowFeatured

ELSS1.8412.0411.348.8515.36Start SIPMotilal Oswal Focused 25 Fund Direct-Growth

Large Cap2.6712.178.684.5414.55Invest NowDHFL Pramerica Gilt Direct Plan – Growth

Gilt2.684.246.5310.818.01Invest NowDSP Midcap Direct Plan-Growth

Mid Cap0.246.867.00-2.1214.26Start SIPDHFL Pramerica Hybrid Debt Fund Direct Plan-Growth

Conservative Hybrid1.064.325.509.569.08Invest NowDSP Focus Direct Plan-Growth

Multi Cap2.4512.559.086.6211.99Start SIPMotilal Oswal Multicap 35 Fund Direct-Growth

Multi Cap2.529.897.010.8515.22Invest NowMotilal Oswal Midcap 30 Fund Direct-Growth

Mid Cap- NowDHFL Pramerica Large Cap Fund Direct Plan-Growth

Large Cap2.3311.0010.3010.0612.51Invest NowDSP Small Cap Direct Plan-Growth

Small Cap2.4412.377.87-8.969.07Start SIPDSP Equity Opportunities Direct Plan-Growth

Large & MidCap1.339.808.484.2514.84Start SIPDSP Credit Risk Direct Plan-Growth

Credit Risk0.441.99-0.35-0.515.02Start SIPMotilal Oswal Long Term Equity Fund Direct-Growth

ELSS1.197.854.91-3.4716.25Invest NowDSP Tax Saver Direct Plan-Growth

ELSS1.8412.0411.348.8515.36Start SIPDSP Liquidity Direct-Growth

Liquid0.591.813.667.617.20Start SIPICICI Prudential Savings Fund Direct Plan -Growth

Low Duration0.972.384.498.637.96Invest NowDSP Savings Direct Plan-Growth

Money Market0.932.204.218.517.02Start SIPDSP Strategic Bond Direct Plan-Growth

Dynamic Bond0.952.604.989.677.14Start SIPDSP 10Y G-Sec Fund Direct-Growth

Gilt with 10 year Constant Duration2.503.805.8310.847.69Start SIPDSP Bond Direct-Growth

Medium Duration1.493.274.116.697.73Start SIPDSP Short Term Direct Plan-Growth

Short Duration1.472.774.989.277.75Start SIPDSP Ultra Short Fund Direct Plan-Growth

Ultra Short Duration0.812.073.106.436.99Start SIPDSP Equity Savings Fund Direct-Growth

Equity Savings1.426. SIPDSP Dynamic Asset Allocation Fund Direct-Growth

Dynamic Asset Allocation0.913.254.297.979.21Start SIPDSP Regular Savings Direct Plan-Growth

Conservative Hybrid1.485.143.471.137.07Start SIPDSP Equity & Bond Direct-Growth

Aggressive Hybrid1.879.579.236.6012.74Start SIP

– Returns less then 1 year are absolute and above 1 year are annualised.

– Returns of 1 year are absolute and above 1 year are annualised..

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