Wealth creators: These large and mid-cap equity mutual funds delivered maximum return in the last one year

Investment through mutual funds is considered a better option for new investors as compared to direct equity exposure. Mutual funds provide advantages such as portfolio diversification, fund management through experienced professionals, and scalability which helps in reducing the investment risk to some level.

The equity market stood highly volatile in the past year due to rising interest rates and the geopolitical tension between Russia and Ukraine. The benchmark equity index BSE Sensex stood almost flat (up 0.6 per cent) in the last year till April 10, 2023. Meanwhile, India’s bluest of the blue chip companies such as Reliance Industries declined 11 per cent, Tata Consultancy Services lost 15 per cent and Infosys also plunged 22 per cent during the same period. 

Amid this volatility there are some mutual funds that not only have protected the invested capital but also provide handsome gains to the investors last year. Large-cap funds invest in select blue-chip stocks. Usually, investors prefer the large-cap category, because it has the lowest drawdown risk among equity funds while providing good returns historically.

According to data from Value Research, ICICI Prudential BHARAT 22 FOF emerged as the top performer in the large-cap equity category. The fund’s direct plan has given over 16 per cent annual return to the investors as on April 10, 2023. A one-time investment of Rs 1 lakh in this fund has grown to Rs 1.16 lakh in one year. While the average annual return for the past three years stood at 38.1 per cent, hence Rs 1 lakh has grown to Rs 2.64 lakh in three years. One year's SIP return for Rs 10,000 per month turned to Rs 1.34 lakh in the last 12 months, indicating a return of 25.4 per cent.

Large and mid-cap funds are another preferred choice of investors as these funds also invest majorly into blue chip stocks and select high-performing mid-cap stocks.

Tata Large and Mid-cap Fund is the top performer in the category. The direct plan of the fund has given an 8.5 per cent annual return. An investment of Rs 1 lakh in the fund has grown to more than Rs 1.08 lakh in one year. While the average annual return for the past three years comes to 32.5 per cent. The figure shows that Rs 1 lakh has grown to Rs 2.33 lakh in three years. One year SIP return for Rs 10,000 monthly stood at 7.4 per cent, indicating Rs 10,000 invested in 12 monthly installments has become Rs 1.24 lakh.

Motilal Oswal Large and Mid-cap Fund is next on the list of the top performers in the Large & Mid-cap equity category. It has given a 7.5 per cent annual return to the investors. A lump sum investment of Rs 1 lakh invested in this fund has grown to more than Rs 1.07 lakh in one year. While the average annual return for the past three years comes as 33.8 per cent, Rs 1 lakh has grown to Rs 2.39 lakh in three years. One year SIP return for Rs 10,000 monthly stood at 10.6 per cent, indicating Rs 10,000 invested in 12 monthly installments has become Rs 1.26 lakh.