Templeton’s aforementioned quotation serves as a sobering reminder that markets are cyclical and that overconfidence should be regarded with caution because it frequently precedes a market decline. Investors can make better investing selections and more skillfully manage market ups and downs by being aware of this.
Unsurprisingly, the Indian stock market has been struggling with significant selling pressure in recent months as a result of persistent outflows of foreign capital, despite having had robust returns over the previous two years.
The Indian economy and corporate earnings were already showing signs of weakness but global uncertainties added to the woes. US President Donald Trump announced fresh tariffs on trade partners and thereafter some countries announced retaliatory tariffs on US goods & services.
The Trump administration has declared a high reciprocal tariff of 26 percent for India. Businesses in export-oriented industries like auto and ancillary, pharmaceutical, information technology, engineering, and gems and jewelry are anticipated to be impacted. Although no announcement has been made as of yet, reports indicate that India is considering lowering duties on US imports in an effort to lessen the impact.
Fears of a potential trade war that may impede global economic growth and lead to a rise in inflation have been heightened by the prospect of tariffs and the potential retaliation actions by certain nations. Consequently, there have been market corrections.
Why investors should prefer Large Cap Funds (Bluechip Funds) now?
So far in 2025, the large-cap segment has performed better than the mid-cap and small-cap segments, in contrast to the previous two years. The BSE Sensex has dropped 5,000 points, or 6.4%, in value. On a year-to-date basis, the BSE Midcap index and BSE Smallcap index underperformed, plunging 15.8% and 20.3%, respectively.
Large-cap equities, sometimes referred to as bluechip stocks, are anticipated to provide higher risk-adjusted returns than mid- and small-cap stocks in the current calendar years, even if market consolidation is likely to continue in the near future due to weak global cues.
This is because the large-cap segment’s valuations presently seem to be in an advantageous position due to persistent selling by foreign investors. Despite the recent corrections, there are still pockets of overvalued stocks in the mid and small-cap sectors.
With a current margin of safety of about 21x, the Nifty 50 PE is trading below its long-term average of about 24.8x. However, a substantial premium is indicated by the BSE Smallcap to Sensex ratio, which is currently close to 0.61 and significantly higher than the long-term median of 0.47.
It is important to remember that large-cap companies often offer more stability and less downside risk than mid- and small-cap stocks during times of increased market volatility. When market mood changes, bluechip stocks are also likely to draw in foreign investment, which could lead to substantial gains. For long-term investors looking for steady growth, large-cap funds, also known as bluechip funds, are a dependable option due to the comparatively lower risk profile of large-cap equities.
Which are the top performing Bluechip Funds to watch out in FY 2025-26?
#1 Nippon India Large Cap Fund
Since its August 2007 launch, the Nippon India Large Cap Fund has demonstrated its capacity to take advantage of market rallies, which enables it to produce respectable alpha and successfully traverse full market cycles. The fund looks for high-growth prospects in large-cap stocks as well as strategic exposure to mid- and small-cap stocks, instead of following market trends.
Over the past five years, the Nippon India Large Cap Fund has returned 21.5% on a rolling returns basis, outpacing the 18.2% category average return and the 18.3% returns of the benchmark BSE 100-TRI.
Table 1: Nippon India Large Cap Fund 5-year performance
| Scheme Name | Returns (%) | Category Returns (%) | Benchmark Returns (%) |
| Nippon India Large Cap Fund | 21.48 | 18.24 | 18.34 |
Data as of April 04, 2025
Returns are on a rolling return basis in CAGR (%). Direct Plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN Research)
83.2% of the Nippon India Large Cap Fund’s assets as of February 28, 2025, are in large caps, 11.2% are in mid-caps, 4% are in small-caps, and the remaining portion is in cash.
HDFC Bank, Reliance Industries, ICICI Bank, Axis Bank, and Bajaj Finance are among its major stock holdings.
#2 ICICI Pru Bluechip Fund
The ICICI Prudential Bluechip Fund, which was introduced in May 2008, has a proven track record of exhibiting steady performance and providing substantial long-term returns. The strategy used by the fund is to find high-growth potential stocks that are reasonably priced and free of sector bias.
In comparison to the category average return of 18.2% and the benchmark Nifty 100-TRI return of 17.6%, the ICICI Pru Bluechip Fund has gained 20.7% on a rolling returns basis over the previous five years.
Table 2: ICICI Pru Bluechip Fund 5-year performance
| Scheme Name | Returns (%) | Category Returns (%) | Benchmark Returns (%) |
| ICICI Pru Bluechip Fund | 20.69 | 18.24 | 17.64 |
The ICICI Pru Bluechip Fund has 85% of its assets in large-cap stocks, 6.2% in mid-cap stocks, and only 0.66% in small-cap stocks as of February 28, 2025. The remaining portion is cash.
Among other companies, the fund has a significant amount of exposure to HDFC Bank, ICICI Bank, L&T, Reliance Industries, and Bharti Airtel.
#3 Canara Robeco Bluechip Equity Fund
Canara Robeco Bluechip Equity Fund, a carefully managed large-cap fund that was introduced in August 2010, has a history of reliably outperforming other funds in a range of market conditions. The fund invests in a mix approach, meaning it seeks out high-growth stocks that are reasonably valued and maintains its position over time.
In comparison to the category average return of 18.2% and the benchmark BSE 100-TRI return of 18.3%, the Canara Robeco Bluechip Fund has gained 20.1% on a rolling returns basis over the last five years.
Table 3: Canara Robeco Bluechip Equity Fund 5-year performance
| Scheme Name | Returns (%) | Category Returns (%) | Benchmark Returns (%) |
| Canara Rob Bluechip Equity Fund | 20.11 | 18.24 | 18.34 |
Data as of April 04, 2025
Returns are on a rolling return basis in CAGR (%). Direct Plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN Research)
The Canara Robeco Bluechip Fund has 88% of its assets in large-cap stocks and 7.7% in mid-cap stocks as of February 28, 2025. It has no exposure to small-cap stocks and keeps the remaining portion in cash.
The fund is more heavily invested in Bharti Airtel, HDFC Bank, ICICI Bank, Infosys, and Reliance Industries.
#4 Baroda BNP Paribas Large Cap Fund
Since its launch in September 2004, the Baroda BNP Paribas Large Cap Fund has repeatedly outperformed both the category average and the benchmark Nifty 100-TRI. By adhering to the investment tenet of “Growth at a Reasonable Price,” it strategically exposes investors to mid-cap firms while concentrating on selecting large-cap stocks with sound balance sheets.
In comparison to the category average return of 18.2% and the 17.6% returns of the benchmark Nifty 100-TRI, the Baroda BNP Paribas Large Cap Fund has gained 20% on a rolling returns basis over the last five years.
Table 4: Baroda BNP Paribas Large Cap Fund 5-year performance
| Scheme Name | Returns (%) | Category Returns (%) | Benchmark Returns (%) |
| Baroda BNP Paribas Large Cap Fund | 20.04 | 18.24 | 17.64 |
Data as of April 04, 2025
Returns are on a rolling return basis in CAGR (%). Direct Plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN Research)
82.1% of the Baroda BNP Paribas Large Cap Fund’s assets as of February 28, 2025, are in large caps, 9.2% are in mid-caps, and the remaining portion is in cash.
HDFC Bank, ICICI Bank, Reliance Industries, TCS, and Kotak Mahindra Bank are the fund’s biggest exposures.
#5 Invesco India Largecap Fund
Since its launch in August 2009, the Invesco India Largecap Fund has demonstrated a history of consistently outperforming both the benchmark and the category average by a significant margin. With some exposure to value opportunities, the fund favors investing in large-cap, growth-oriented firms.
Over the past five years, the Invesco India Largecap Fund has returned 19.9% on a rolling returns basis, outpacing the category average return of 18.2% and the benchmark Nifty 100-TRI’s 17.6% return.
Table 5: Invesco India Large Cap Fund 5-year performance
| Scheme Name | Returns (%) | Category Returns (%) | Benchmark Returns (%) |
| Invesco India Largecap Fund | 19.87 | 18.24 | 17.64 |
Data as of April 04, 2025
Returns are on a rolling return basis in CAGR (%). Direct Plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN Research)
The Invesco India Largecap Fund has 84.5% of its assets in large-cap stocks as of February 28, 2025, 9.2% in mid-cap stocks, 5.9% in small-cap stocks, and the remaining amount in cash.
The fund is optimistic about large-cap giants like Reliance Industries, HDFC Bank, ICICI Bank, Infosys, and Bharti Airtel.
To Conclude…
The risk-reward ratio seems to be moving in favor of large-cap funds, in contrast to recent years. These funds are made up of reputable businesses that have the potential to provide consistent profits in the future. As a result, while large-cap funds may not be able to produce exceptionally high returns, they can provide superior protection against downside risk in comparison to mid-cap and small-cap funds, which will ultimately provide investors with sufficient returns.
Nevertheless, investing in large-cap funds carries some risk because they are also subject to market swings. Therefore, when investing in large-cap funds, one should have a minimum three to five-year investment horizon.
Although market corrections might cause investors to feel uneasy, it is important to remember that they give fund managers a chance to choose firms with promising long-term outlooks. As a result, investors with a long-term outlook can continue to allocate to Bluechip mutual funds through SIP or by making lump sum investments spaced out over time.
Investors should carefully choose schemes that consistently perform well on both qualitative and quantitative metrics because performance is not a reliable predictor of future returns.