What a large cap fund holds
At least 80% in the top 100 companies by full market value — India's best-known banks, IT firms, consumer and energy companies. They are the least volatile part of the equity market, though they still fall in bad years.
Active fund or index fund?
An active large cap fund pays a manager to pick the best of these 100 shares. An index fund or ETF simply buys the whole index — the Nifty 50, Nifty 100 or Sensex — at a much lower cost.
| Active large cap fund | Index fund / ETF | |
|---|---|---|
| Aim | Beat the index | Match the index |
| Yearly cost | Higher | Lowest |
| Risk of trailing the index | Yes | Only by costs and tracking error |
| Manager matters | A lot | Hardly |
Because large companies are closely watched by many analysts, beating their index consistently is hard, and many active large cap funds have trailed it over long periods after costs. That's why many investors use an index fund as their core holding. If you choose an active fund, compare its returns over 5–10 years against its benchmark and its expense ratio against index funds.
Who they suit
- First-time equity investors.
- The core of any long-term equity portfolio.
- Goals 5 years or more away.
Tax
20% on gains within 12 months; 12.5% on gains above ₹1.25 lakh a year after.
Mutual fund investments are subject to market risks; read all scheme-related documents carefully.
For general information only, not investment advice or a recommendation. Oxon Fintech is a loan facilitation platform, not a SEBI-registered investment adviser, bank or mutual fund distributor, and does not sell bonds, deposits or funds. Rates and rules are as checked on the date above; confirm with the issuer, bank or fund house before investing. Mutual fund investments are subject to market risks; read all scheme-related documents carefully.