Large-cap funds in the red: 29 of 33 schemes deliver negative returns in 1 year, category average at -3.09%

Active large-cap mutual funds have had a difficult year. The category average return stands at -3.09% over the past one year, with only four of the 33 funds in the category delivering positive returns. For investors who expected large-cap funds to provide relatively stable equity exposure, the latest numbers make for a disappointing one-year snapshot.

Quant Large Cap Fund topped the category with a 5.68% return, followed by Taurus Large Cap Fund at 5.13%. Bank of India Large Cap Fund and Invesco India Large Cap Fund were the only other schemes to remain in positive territory, with returns of 2.84% and 1.30%, respectively.

The remaining 29 funds posted negative returns. That means an investor looking only at the past one-year period would not have seen FD-like returns from any of these equity funds. However, large-cap funds are market-linked equity investments and are not comparable with fixed deposits in terms of risk or return.

Only four large-cap funds delivered positive returns

The gap between the top-performing fund and the rest of the category is notable. Quant Large Cap Fund’s 5.68% return was followed closely by Taurus at 5.13%, but the returns fell sharply thereafter. Bank of India Large Cap Fund delivered 2.84%, while Invesco India Large Cap Fund returned 1.30%.

ITI Large Cap Fund was almost flat at -0.19%, while Bajaj Finserv Large Cap Fund returned -0.78%. Baroda BNP Paribas Large Cap Fund and Bandhan Large Cap Fund fell 1.10% and 1.24%, respectively.

At the other end, Samco Large Cap Fund was the worst performer in the dataset, declining 9.08% in one year. This creates a 14.76 percentage-point gap between the highest and lowest returns in the category.

Even the biggest large-cap funds were mostly in the red

The negative returns were not restricted to smaller schemes. Several of the largest large-cap funds by assets also recorded losses over the past year.

ICICI Prudential Large Cap Fund, the largest fund in the dataset with ₹80,206 crore in net assets, returned -6.04%. SBI Large Cap Fund, with ₹55,140 crore, fell 2.63%, while Nippon India Large Cap Fund, with ₹54,134 crore, declined 5.83%.

HDFC Large Cap Fund, which manages ₹39,933 crore, returned -3.95%, while Mirae Asset Large Cap Fund and Axis Large Cap Fund fell 4.16% and 4.09%, respectively. Aditya Birla Sun Life Large Cap Fund, with ₹29,711 crore in assets, declined 5.14%.

This means the one-year weakness was visible even among several of the category’s biggest schemes, rather than being limited to funds with relatively small asset bases.

What should investors make of the one-year performance?

The data shows that negative one-year returns have been widespread across active large-cap funds. Only four of the 33 funds were able to generate positive returns, while the category as a whole remained down 3.09%.

However, a one-year return alone does not establish whether a large-cap fund is suitable for an investor or whether it should be switched. Equity funds can go through periods of negative returns, and a meaningful assessment would also require longer-term performance, benchmark comparison and consistency across market cycles.