In volatile equity markets, where you are seeing geopolitical and macroeconomic uncertainty, what you need is stability.
If the equity markets fall, it is the midcap and smallcaps that are likely to be more vulnerable. In the current environment, largecaps are possibly a prudent choice.
Also, largecaps or the top 100 companies on market capitalisation, enjoy economies of scale (due to their large-scale operations), have access to resources, risk-taking ability, wider moats, are run by mostly efficient and ethical managements, and are market leaders.
One of the best ways to invest in largecaps is through large cap mutual funds. They are mandated to invest at least 80% of their total assets in equity & equity-related instruments of largecap companies. Moreover, you enjoy the benefit of wide diversification.
In this editorial, we take you through 3 large cap funds that have fared well on 3-year and 5-year rolling returns, as well as risk ratios (3-year standard deviation, Sharpe ratio, Sortino ratio, and up/down capture ratio), which you could consider for SIPs.
#1 Nippon India Large Cap Fund
It was launched in August 2007 as Reliance Large Cap Fund. After Nippon India Mutual Fund took over Reliance Mutual Fund in September 2019, it was renamed to Nippon India Large Cap Fund.
Initially, the fund made targeted investments in both largecaps and midcaps, focusing on the top 200 companies.
However, in 2018, it was reclassified as a large cap fund to meet the regulator’s categorisation and rationalisation norms. Since then, the fund has inclined its portfolio to largecaps.
It focuses on long-term growth by identifying high-growth-potential stocks using the Growth at Reasonable Price (GARP) strategy. The fund aims to own dominant businesses at reasonable valuations to reduce risks and generate alpha.
While picking stocks, the fund looks at criteria such as sound management, a good track record of the company, potential for future growth, and the industry’s economic scenario.
It looks for companies which are leaders or potential leaders, with well-established business models, sustainable & growing free cash flows, and a high return on equity (ROE) and/or having the potential to generate high ROE.
As of July 2025, the fund has assets under management worth Rs 442 billion (bn), the third largest in the category.
The fund typically invests in around 60–70 stocks, and as of July 2025, it was holding 69. A large chunk of its portfolio—over 83%—is in large-cap companies, with 11% in midcaps and about 4% in smallcaps.
The top 10 holdings make up nearly 44.5% of the portfolio, led by HDFC Bank at 8.9%, Reliance Industries at 6.3%, and ICICI Bank at 5.5%.
When it comes to sectors, banks take the biggest share at 23.4%, followed by FMCG at 7.7% and finance at 7%.
The fund follows a ‘buy-and-hold’ approach, as its portfolio turnover has been in the range of 15-30% in the last one year. This has helped to reward its investors well on a risk-adjusted basis.
In the last 10 years, the fund has delivered an XIRR or SIP return of 17.64%, outperforming the Nifty 100 – TRI, which clocked 14.26% (as of 8 September 2025).
Nippon India Large Cap Fund – 10 Year SIP
A monthly SIP of Rs 10,000 in the fund over 10 years, i.e., a total investment of Rs 1.2 million (m), would now be valued at Rs 3.03 m.
#2 ICICI Prudential Large Cap Fund
This scheme was launched in May 2008 as ICICI Prudential Bluechip Fund and, with effect from 16 June 2025, was renamed as ICICI Prudential Large Cap Fund to reflect the investment categories the scheme falls into.
The investment strategy includes shortlisting companies with a proven track record, quality management, and good growth potential. The fund follows a bottom-up approach to identify bargain stocks with promising potential for long-term growth.
While the fund has shown its flair for a value style of investing, it has not shied away from taking a growth approach. While picking stocks, it does not follow a sector bias.
The fund manager looks for the scalability of the companies under consideration. There is also a high weightage given to the track record of the company’s management and the scope of improving profitability.
As per the July 2025 portfolio, it is the largest in the large cap fund, with an AUM of nearly 718 bn.
The fund usually holds around 60-70 stocks in its portfolio. As per the July 2025 portfolio, it held a well-diversified portfolio comprising 63 stocks, of which 81% are in largecaps, 9% in midcaps, and 0.2% in smallcaps. It is also holding around 9% currently in cash & cash equivalents.
The top 10 stocks comprise 54.2% of the portfolio and include names such as HDFC Bank (9.7%), ICICI Bank (9%), and Reliance Industries (6.7%), among others.
The top 3 sectors are banks (23.6%), auto & ancillaries (11.2%), and oil & gas (9.1%).
The fund has followed a buy-and-hold strategy as reflected by its low portfolio turnover ratio, which has ranged between 15-22% in the last one year.
This strategy has helped in delivering superior performance, consistently outperforming its benchmark and the category average by managing the risk well.
In the last 10 years, the fund has delivered an XIRR or SIP return of 16.65%, outperforming the Nifty 100 – TRI, which clocked 14.26% (as of 8 September 2025).
ICICI Prudential Large Cap Fund – 10 Year SIP
A monthly SIP of Rs 10,000 in the fund over 10 years, i.e., a total investment of Rs 1.2 m, would now be valued at Rs 2.87 m.
#3 DSP Large Cap Fund
This scheme was launched in March 2003 and was earlier known as the DSP Top 100 Fund. To align with the investment categories the scheme falls into, it was renamed as DSP Large Cap Fund. As per its July 2025 portfolio, it is managing assets of over Rs 63 billion (bn).
It is a benchmark-agnostic scheme in the Large Cap Fund category, following a blend of growth and value style of investing to pick high-potential stocks across sectors.
It focuses on stocks having long-term growth potential, limited downside to the quality of the business, and that are trading at a lower price than their intrinsic worth. It avoids mirroring the index as well as staying away from chasing market momentum, instead focusing on the quality of earnings.
It usually maintains a focused portfolio, limiting the number of stocks to around 30. Currently, it has 32 stocks in its portfolio, of which 80% are in largecaps, and around 5% and 6% are held in midcaps and smallcaps, respectively. Cash & cash equivalents at present are around 9% of the fund’s portfolio.
The top 10 stocks comprise 54.2% of the fund’s portfolio and include names such as HDFC Bank (9.5%), ICICI Bank (8.2%), Mahindra & Mahindra (5%), etc.
Among the various sectors, the top 3 sectors are banks (30%), auto & ancillaries (12.9%), and healthcare (8.5%).
The focus is on building a high-conviction portfolio, and so the portfolio turnover ratio is also in the range of 18-42%.
By taking concentrated stock and sectoral exposure in fundamentally sound long-term ideas has enabled the fund to generate returns almost in line with the benchmark, the Nifty 100 – TRI.
But in terms of risk management and risk-adjusted returns, the fund has fared remarkably well – be it sharpe, sortino and up/down capture ratios.
In the last 10 years, the fund has delivered an XIRR or SIP return of 14.23% compared to 14.26% by the Nifty 100 – TRI (as of 8 September 2025).
DSP Large Cap Fund – 10 Year SIP
A monthly SIP of Rs 10,000 in the fund over 10 years, i.e., a total investment of Rs 1.2 m, would now be valued at Rs 2.52 million m.
Conclusion
You may look at large cap funds for your core mutual fund portfolio. In volatile times, SIPs can help you mitigate risk with the inherent rupee-cost averaging feature, but don’t get carried away.
Among a plethora of schemes available, make a sensible choice.
And ensure you have at least a 3-year investment horizon when investing in large cap funds.
Be a thoughtful investor.
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