BEST EQUITY FUNDS

Best performers in equity mutual fund category focused on buying high-growth companies that have competitive advantage at reasonable valuations.

- RASHMI PRATAP

1 LARGE-CAP FUNDS 

LARGE-CAP MUTUAL FUNDS offer consistent returns with low risk. They invest at least 80% corpus in top 100 companies by market capitalisation. Today, large-cap is the second-largest equity MF category after flexi-cap—it accounts for 14% assets under management (AUM) of equity and growth-oriented schemes.

Canara Robeco Bluechip Equity is the best performing fund in the category followed by ICICI Prudential Bluechip-Growth and Kotak Bluechip at second and third ranks, respectively. It delivered three-year trailing returns of 16.77% and five-year trailing returns of 16.84%. Category returns were 16.99% and 13.66%, respectively. “Our investment strategy is a combination of compounding stories and alpha generators. Compounding stories, 65-70% of the portfolio, are businesses that grow in double digits and have competitive advantages due to brand, regulations or scale,” says Shridatta Bhandwaldar, who manages Canara Robeco Bluechip Equity Fund as head of equities, Canara Robeco Asset Management Company. “The rest 30% are alpha generators where we want to play cyclicity. These are not necessarily the best within the sector,” he adds. “We have seen multiple cycles and have done well even during volatile periods as we look at fundamentals as well as valuations,” he says. Largecap funds work well for investors looking for stable returns who can stay invested for three-five years. “The longer the better,” says Bhandwaldar. The fund’s top three holdings are financials, information technology and consumer discretionary.