But still, most investors are not able to identify mutual funds schemes that can create wealth for them in the long-term. Therefore, investors should use certain criteria to short-list the schemes to invest in. Some of the criteria include:
v Historical performance of the schemes
v How consistently the scheme has performed
v The investment philosophy of the fund manager
v The history of the fund manager, etc.
Besides, SEBI has also recently reclassified the mutual funds schemes with a clear definition. This has made the selection criteria easier since now, you can compare apples with apples and so on. As per SEBI guidelines, large-cap mutual funds have to invest minimum 80% of the total asset in large-cap stocks. In order to ensure uniformity in the classification of large-cap, mid-cap, and small-cap stocks, SEBI has also defined large-cap, mid-cap, and small-cap stocks as follows:
- Large Cap: 1st -100th company in terms of full market capitalization
- Mid Cap: 101st -250th company in terms of full market capitalization
- Small Cap: 251st company onwards in terms of full market capitalization
(in Rs cr)
|1Y (%)||3Y (%)||5Y (%)|
|Aditya Birla SL Frontline Equity Fund(G)||20,203||5.4||9.7||16.8|
|Franklin India Bluechip Fund(G)||7,933||5.2||8.3||14.4|
|ICICI Pru Bluechip Fund(G)||17,496||9.2||11.0||16.7|
|Reliance Large Cap Fund(G)||10,126||6.7||9.5||18.8|
|SBI BlueChip Fund-Reg(G)||19,064||6.3||9.8||18.0|
AUM as of June 2018; Returns as on July 12, 2018; Source: ACE MF)
1. Aditya Birla SL Frontline Equity Fund
The fund predominantly invests in companies from the BSE 200 Index, and diversifies across industries and sectors to bring stability to the fund’s portfolio. It tries to maintain sector exposure that is approximately equal to the sectoral weight in the BSE 200 Index, which reduces concentration risk in a single sector.
2. Franklin India Bluechip Fund
The fund predominantly invests in companies that are large and established, have a long track record, and enjoy a leadership position in their respective industries.
3. ICICI Bluechip Fund
The fund invests in companies with a good and proven track record, strong fundamentals, and capable of delivering consistent long-term returns.
4. Reliance Large Cap Fund
The fund predominantly invests in established companies enjoying a leadership position in their respective industries and sustainable free cash flow, available at a reasonable valuation.
5. SBI BlueChip Fund
The fund invests in companies which have significant market share and are market leaders in their industries.