What is the Risk in Large Cap Funds?


  • You can know the risk of investing in large cap mutual fund by looking at the riskometer.
  • Large Cap Funds are a less risky option than other equity mutual like Small Cap, Mid Cap & Sector Funds.

Risks in mutual funds are due to price fluctuations in stocks because of changes in interest rates, inflation, demand and supply, etc. Fluctuations in stock prices gets the Net Asset value (NAV) of the fund down bringing losses to the investor. This is why Asset Management Companies (AMCs), fund managers and advisors repeatedly ask investors to assess their risk profile and also the fund’s risk profile, before investing. So it importanto to know the risk in large cap funds before diving into it. 

Every mutual fund has some amount of risk associated to it. Especially, equity mutual funds are considered to be the riskiest. Large cap mutual fund is an equity scheme that invests a major chunk of their corpus in equity and equity related instruments. They invest in the stocks of top 100 companies according to market capitalization. Such companies are mostly blue chip companies. Stock prices of these companies do not fluctuate much because they are well established companies and recognized as industry leaders. They have a stable growth and pay out regular dividends to investors. Thus, the risk associated with large cap funds are moderate as compared to other equity funds.

How to Know the Risk in Large Cap Funds?

Securities Exchange Board of India (SEBI), the regulatory body for securities market in India, has made it mandatory for every Mutual Fund to display a riskometer to help investors assess the risk of the mutual fund scheme. The riskometer has five levels of risks each represented by a different colour. These five levels are low, moderately low, high, moderate, moderately high and high. Large cap funds are generally categorized under funds whose risk level is moderately high.

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Which Investors should Opt for Large Cap Funds?

Investors who have a long term investment horizon (at least for 5 years) and have a moderate risk taking capacity, can invest in large cap funds. Cautious investors will benefit the most out of this fund as these funds have stable returns. Even during market lows, these funds don’t suffer much in comparison to midcap and small cap funds.

Recommended Large Cap Mutual Funds with their Risk Profile!

Fund NameRiskometer 1 year Return3 year Return5 year
Reliance Large Cap FundModerately High-9.22%6.66%8.09%
SBI Bluechip FundModerately High-4.82%5.12%8.75%
ICICI Prudential Bluechip FundModerately High-6.43%7.14%7.96%
Mirae Asset Large Cap FundModerately High-3.21%9.47%10.83%
Motilal Oswal Focused 25 FundModerately High-4.87%6.63%8.87%

Note: All the data  that has been mentioned in this articleis sourced from Value Research as on Sept 4, 2019. The data is in regards to the Regular Plan.

How can you Invest in Large Cap Funds Online?

For investors who want to start investing in large cap mutual funds, can do so through Wishfin. It is one of the best financial marketplace for investing in mutual funds. You can compare the returns generated from different funds and then take a decision as to which fund will be the best fit for you. All you have to do is to follow the below mentioned steps:

Log on to www.wishfin.com

  • Go  to ‘Mutual Funds’
  • Click on on ‘Login/Register

If you are a new investor who is keen on investing, you need to follow the below mentioned registration process.

Registration Steps:

  • Mention your mobile number
  • Click on ‘Next’
  • Enter the One-time Password (OTP) received on your mobile number
  • Click on ‘Verify and Continue’
  • Mention full name, email, city
  • Create a password that must have the required number of alphabets, numeric and special characters
  • Click on ‘Sign Up’
  • Mention a few more details before the registration can be made successfully
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Login Steps

  • Mention your email or mobile number
  • Click on ‘Get OTP’ to receive the same
  • Enter OTP at the prescribed space
  • Click on ‘Login’
  • Go to ‘Explore Mutual Funds’
  • Go to ‘Equity’ and then on to ‘Large Cap Funds’
  • Click on ‘Invest’ below any of the large cap funds shown above

Disclaimer: Mutual Fund Investments are subject to market risks, read all scheme related documents carefully before investing.