Largecap Funds generally tend to give returns based on movement of the indices, not precisely though. The Sensex and the Nifty have given whopping returns in the last 1 year and benchmark indices have followed with almost similar returns. Don't read too much into returns of mutual funds over the last 1 -year. The simple fact is that last time in May, markets had collapsed and the Sensex was trading near 29,000 points and since vaccine roll-outs across the globe, some global indices have nearly doubled.
Here are 3 largecap funds, that have generated more than 50% in the last 1-year
Tata Largecap Fund
Tata Largecap Fund has generated a returns of 61% in the last 1-year, which is much better compared to some of the other largecap funds. The three year returns is 11.20%, which is more like normal. The equity scheme like most other largecap funds has stocks like ICICI Bank, HDFC Bank, Infosys, Reliance Industries and Axis Bank in its portfolio among others.
A large part of the money is invested in stocks, with only about 2.3% in cash and cash holdings. We are not recommending any equity mutual fund schemes on account of the way the markets have rallied.
It's unlikely that investors would generate stupendous returns from equity mutual funds in the next 1-3 years, given the sharp rally of the last few quarters. It's better to stay invested rather than allocating fresh resources.
Edelweiss LargeCap Fund
This is another fund that has done well over the last 1-year. Returns are near 57%, which is not bad at all. The 5-year returns from the fund is more like 15% on an annualized basis. Like other mutual funds, HDFC Bank tops the portfolio when it comes to holdings, while other stocks in the portfolio include names like Infosys, ICICI Bank and Bharti Airtel.
The returns from mutual funds are likely to be in line with how the markets move. At the moment stocks markets across the globe are in a sweet spot. Bond yields are low, inflation is low and central banks have easy money policy, which is fuelling a rally in stocks. Fundamentals at the moment have little or no relevance. Investors may opt for investing money in SIPs and lumpsum investment in stocks is not advisable.
Canara Robeco Bluechip Equity Fund
This fund has been well-rated by most analysts. It has been a consistent performer over the years. The 1-year returns from the fund has been slightly more than 55%. The three year returns on an annualized basis is significantly less at 15.36%. The cash and cash equivalents at the fund is 4%, while the remaining is held in equity shares.
Like all other equity mutual funds schemes, one can invest through the SIP route. In fact, we advocate very strongly, the Systematic Investment Plan route, as lumpsum is not advisable, especially when the markets are at highs.
Interestingly, the fund has been given a 5-star rating from Crisil, as well as Value Research.
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