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If there is a long-term investment approach, then invest in a large cap fund

If there is a long-term investment approach, then invest in a large cap fund

 


If you want to invest for the long term, then you should choose the large-cap scheme of mutual funds. This is because it is a good scheme to prepare a portfolio that gives consistent returns. This scheme of many mutual funds has given better returns.

 

Such funds mainly invest in large-cap stocks or companies whose market capitalization is more than Rs 20 thousand crores. Large-cap stocks have a good track record in the market. They are strong management, have good corporate governance and also pay regular dividends.

 

According to analysts, large-cap funds are an ideal investment option for first-time investors, or for those who want to take less risk. Large-cap funds bring stability to the portfolio. These funds invest in stocks of companies that are well established and have been in business for many years. Because of this, investment in these companies provides a stable and consistent return.

 

These companies experience both rapid and slowdown markets and maintain their consistent performance. Investors come to these funds because they continue their performance even in market fluctuations, which also gives good investment experience. To take full advantage of this category, it is necessary that you come for long-term investment in them.

 

Among the funds that have a track record of 15 years in this category, Aditya Birla Sun Life Frontline Equity Fund has given a return of 21 times in 18 years. That is, if someone had done a monthly SIP of 10 thousand rupees 18 years ago, then that investment of 21.6 lakh has become 96.31 lakh rupees today. This is because compounding interest benefits in long-term investment. That is, it has had a return of 18.84 per cent CAGR since August 30, 2002.

 

If funds of 15 years duration are seen in this category, then the end of August data shows that the Birla Frontline Equity Fund has given a return of 14.37 per cent. HDFC Top 100 Fund has given a return of 13.79 per cent while DSP Top 100 Equity Fund has given a return of 12.92 per cent. Kotak Bluechip Fund has given a return of 12.58 per cent in the same period.

 

Experts believe that Aditya Birla Sun Life Frontline Equity Fund is a reliable fund in this category. This fund is almost two decades old and is being managed by a very experienced fund manager. It has a good record of performance over many cycles and over a long period. This fund has the ability to choose good companies. Especially those companies that are market leaders with strong management and good corporate governance. Whose balance sheet is good and there is a possibility of higher growth in the large-cap segment.

 

Investors should keep in mind that large-cap funds provide stability and have low volatility. While the returns of these funds may be an average, they continue to provide returns. From a long-term perspective, these funds provide better returns based on compounding in different market cycles.

 

Mutual fund investments are subject to market risks. Please read the scheme information and other related documents before investing.


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