Best SIP Mutual Funds with High Returns: Quant Large & Mid Cap Fund vs Bandhan Core Equity Fund
Mitali Dhoke
Aug 09, 2024 / Reading Time: Approx. 15 mins
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Given the current market volatility, SIPs are considered a prudent option as they allow investors to buy more units when prices are low and fewer when prices are high. This strategy, known as rupee cost averaging, helps in lowering the average cost per unit over time, reducing the impact of market volatility.
SIPs leverage the power of compounding, where the returns generated on investments are reinvested to generate further returns. The longer the investment horizon, the greater the compounding effect, which can significantly enhance wealth creation, especially in a volatile market.
SIPs allow investors to start with a smaller amount, spreading out the investment over time rather than making a lump-sum investment. This reduces the risk of investing a large amount at the wrong time, particularly in a market downturn.
However, understanding the true performance of these investments requires a sophisticated approach, particularly when assessing returns. SIP XIRR (Extended Internal Rate of Return) is a critical metric that offers an accurate measure of returns, considering the time and frequency of investments.
What are XIRR Returns in Mutual Funds?
XIRR (Extended Internal Rate of Return) is a method used to calculate the annualised return on investments that have irregular cash flows. In the context of SIPs, where you make regular investments over time (e.g., monthly), each instalment represents a cash flow. When you redeem or sell your investment, the return is realised. XIRR takes into account the timing and amount of each cash flow, providing an annualised return that reflects the real performance of your SIP over the investment period.
SIPs involve multiple investments over time, making it challenging to calculate a simple average return. XIRR accurately measures the performance by considering the time value of money, giving you a true annualised return. XIRR helps in tracking the progress of your SIP investments. By calculating the XIRR at regular intervals, you can assess whether your SIP is on track to meet your financial goals.
[Read: XIRR vs CAGR in Mutual Funds: Which is the Better Tool to Evaluate Returns?]
By calculating the XIRR for various SIPs, you can identify mutual funds that consistently deliver good returns over different market cycles. A higher XIRR indicates better performance. XIRR reflects how well a fund's management has navigated market volatility. Funds with a high XIRR during both bull and bear markets suggest strong management and a well-balanced portfolio.
XIRR gives you a clear picture of the actual returns you are earning, considering all factors like investment amount, frequency, and timing. This helps in making informed decisions about which mutual fund schemes are worthy of making a SIP investment.
[Read: SIP Contributions Surge: Investor Appetite for Growth Fuels Record Inflows]
Invest in Mutual Funds via SIP to Weather the Market Volatility
In the current volatile and uncertain market environment, investing in Large & Mid Cap mutual funds through Systematic Investment Plans (SIPs) provides a strategic method for wealth accumulation. These funds focus on maintaining portfolio stability and growth, making them a prudent choice for long-term investment.
The Nifty LargeMidcap 250 index is a comprehensive benchmark that captures the performance of the largest and most dynamic companies in the Indian equity market, spanning both the large-cap and mid-cap segments. In 2024, this index has emerged as a critical indicator of market trends, reflecting the robust growth and resilience of Indian corporates across diverse sectors.
Data as of August 08, 2024
Do note past performance is not an indicator of future returns
The securities quoted are for illustration only and are not recommendatory.
(Source: ACE MF, data collated by PersonalFN Research)
In 2024, the Indian equity market's large and mid-cap segments have shown remarkable performance and have continued to draw significant attention from investors, both domestically and internationally. The large-cap segment, comprising established companies with market capitalisations typically above Rs 20,000 crore (USD 2.5 billion), remains the backbone of the Indian equity market.
Despite global economic uncertainties and regional challenges, the large-cap segment has demonstrated resilience and moderate growth, driven by robust corporate earnings, expanding digital infrastructure, and government reforms aimed at bolstering economic activity.
The mid-cap segment has attracted significant interest due to its potential for higher returns compared to large caps. Companies in this category are often in a phase of rapid expansion and innovation, making them appealing to growth-oriented investors. Industries such as pharmaceuticals, technology, and consumer goods are well-represented in the mid-cap space.
[Read: 3 Best Large & Mid Cap Funds for 2024 - Top Performing Large & Mid Cap Mutual Funds in India]
Having said that, investors may consider investing in large & mid-cap mutual funds via the SIP route to navigate the market fluctuations and strengthen their portfolio. This article provides an in-depth comparison of two popular large & midcap funds that one may consider investing via SIP mode, an analysis of their investment strategies, market performance, SIP returns across time frames, risk factors, and suitability for different types of investors, to aid you in making an informed investment decision.
# - Quant Large & Mid Cap Fund
Quant Large & Mid Cap Fund is an open-ended equity scheme that belongs to Quant Mutual Fund. It is a well-established fund launched in December 2006 and currently has an AUM of Rs 3,572.83 crore (as of July 31, 2024).
The Bandhan Core Equity Fund, formerly known as IDFC Core Equity Fund, is another strong contender in the large-cap and mid-cap segment. This fund has a long-standing track record and has been a favourite among investors seeking stable and high returns through equity investments.
# - Bandhan Core Equity Fund
Bandhan Core Equity Fund is an open-ended equity scheme and belongs to Bandhan Mutual Fund. Launched in August 2005, it is a popular large & mid cap scheme and currently holds an AUM of Rs 5,360.46 crore.
Bandhan Core Equity Fund is benchmarked against Nifty LargeMidcap 250 - TRI as a primary index. The scheme aims to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity-related securities of large-cap and mid-cap companies.
Investment Style and Philosophy:
Quant Large & Mid Cap Fund: follows an aggressive investment style with a strong emphasis on growth-oriented stocks. The fund managers adopt a dynamic approach, actively selecting a well-diversified portfolio that balances large-cap stability with mid-cap growth potential.
The investment philosophy of this fund is based on bottom-up stock selection, identifying opportunities across various sectors, with a keen focus on companies that exhibit strong fundamentals, robust growth potential, and favourable valuations.
Bandhan Core Equity Fund: adopts a fundamentally driven investment style. The fund primarily focuses on large-cap stocks for core stability while selectively incorporating mid-cap stocks to capture growth. The investment style is grounded in a long-term perspective, favouring high-quality companies with consistent performance, strong corporate governance, and sustainable business models.
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Performance Comparison: SIP - XIRR Returns of both the schemes
Data as of August 08, 2024
Do note past performance is not an indicator of future returns
The securities quoted are for illustration only and are not recommendatory.
(Source: ACE MF, data collated by PersonalFN Research)
As we can see from the above table, the Quant Large & Mid Cap Fund and Bandhan Core Equity Fund have both delivered impressive performances over the years, with each scheme showing strong returns across various time frames, which highlights their strengths in the Large & Mid Cap category.
Over the short term, the Bandhan Core Equity Fund has shown superior performance. This suggests that Bandhan's strategy has been more effective in capturing the market's recent momentum, potentially driven by its selection of mid-cap stocks, which tend to be more responsive to market upswings.
However, when examining the performance over a longer horizon, the Quant Large & Mid Cap Fund stands out. Over the past three years, the fund has delivered a stellar CAGR of 36.45%, outperforming both the category average of 27.71% and the benchmark, Nifty LargeMidcap 250 TRI, which posted a CAGR of 27.11%.
This strong performance continues over the five, seven, and ten-year periods, where Quant maintains higher CAGRs, particularly notable with a 10-year CAGR of 23.17%. This consistent outperformance indicates Quant's robust stock selection and effective management, particularly in balancing the stability of large-cap stocks with the growth potential of mid-caps.
Graph: Large & Mid Cap category average SIP Returns over different time frames
Data as of August 08, 2024
Do note past performance is not an indicator of future returns
The securities quoted are for illustration only and are not recommendatory.
(Source: ACE MF, data collated by PersonalFN Research)
Bandhan Core Equity Fund, while slightly trailing Quant in longer periods, has also delivered solid long-term returns with a 10-year CAGR of 20.92%, outperforming the category average of 19.08% and the benchmark. This consistent performance makes Bandhan a reliable choice for investors seeking steady long-term growth.
However, the Quant fund's ability to consistently outperform both the category and benchmark across various timeframes suggests it may be better suited for investors with a higher risk tolerance who are looking for potentially higher returns in the long run.
This analysis only considers returns. Before making an investment decision, you should also evaluate the fund's expense ratio, portfolio holdings, and risk profile to see which aligns better with your investment goals.
Moreover, past performance should not be the only element, it's important to note that one may consider other factors like portfolio holdings, risk profile, and investment philosophy before making a decision.
[Read: 7 Top-performing Value Mutual Funds with High Returns Based on 10-Year SIP]
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Portfolio Composition: Asset Allocation of Schemes
Both Quant Large & Mid Cap Fund and Bandhan Core Equity Fund are popular choices for investments in the large & mid cap segment, but their asset allocation strategies differ slightly.
| Scheme Name |
Large Cap % |
Mid Cap % |
Small Cap % |
| Bandhan Core Equity Fund |
44.49 |
36.32 |
15.93 |
| Quant Large & Mid Cap Fund |
51.32 |
37.00 |
- |
Data as of August 08, 2024
Do note past performance is not an indicator of future returns
The securities quoted are for illustration only and are not recommendatory.
(Source: ACE MF, data collated by PersonalFN Research)
The asset allocation of the Quant Large & Mid Cap Fund and the Bandhan Core Equity Fund reflects their distinct strategies in balancing growth potential with stability.
The Quant Large & Mid Cap Fund allocates a significant 51.32% of its portfolio to large-cap stocks, emphasizing its focus on well-established companies with strong market capitalization. This higher allocation to large-cap stocks aligns with the fund's objective of providing a stable core to the portfolio, ensuring that a substantial portion of the investments are in companies that offer reliable performance and resilience in volatile market conditions.
Additionally, the fund allocates 37.00% to mid-cap stocks, which introduces growth potential by tapping into companies that are still in their expansion phase, but it does not invest in small-cap stocks, which may suggest a more conservative approach that prioritizes stability over the potential high volatility of smaller companies.
On the other hand, the Bandhan Core Equity Fund presents a more diversified approach across market capitalizations, with 44.49% allocated to large-cap stocks, slightly less than Quant's allocation. This indicates that while Bandhan maintains a strong foundation in large-cap stocks for stability, it places a greater emphasis on mid-cap and small-cap stocks compared to Quant. The fund allocates 36.32% to mid-cap stocks, nearly matching Quant's mid-cap allocation, which suggests a similar focus on growth opportunities from mid-sized companies.
However, Bandhan's additional 15.93% allocation to small-cap stocks distinguishes it from Quant, introducing a higher level of risk and potential reward into the portfolio. This allocation indicates Bandhan's willingness to invest in smaller, potentially high-growth companies, which can significantly enhance returns if these companies perform well but also introduce higher volatility.
The difference in small-cap exposure between the two funds is a critical point of distinction. This variation in asset allocation strategies reflects the differing risk-return profiles of the two funds, making Bandhan potentially more suitable for aggressive investors and Quant more appealing to those seeking balanced growth with lower risk exposure.
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Market Volatility: Risk profile of Schemes
The risk profiles of the Quant Large & Mid Cap Fund and Bandhan Core Equity Fund reveal key insights into how each scheme balances volatility with returns.
| Risk Ratio |
Bandhan Core Equity Fund |
Quant Large & Mid Cap Fund |
| Standard Deviation (3 Year) |
14.62 |
16.99 |
| Sharpe |
0.40 |
0.40 |
| Sortino |
0.81 |
0.83 |
Data as of August 08, 2024
Do note past performance is not an indicator of future returns
The securities quoted are for illustration only and are not recommendatory.
(Source: ACE MF, data collated by PersonalFN Research)
Looking at the standard deviation over the past three years, the Quant Large & Mid Cap Fund exhibits a higher standard deviation of 16.99 compared to the Bandhan Core Equity Fund's 14.62. A higher standard deviation indicates that the Quant fund experiences greater price fluctuations, making it a more volatile investment. This suggests that investors in the Quant fund are exposed to a higher level of risk, as the fund's returns tend to vary more widely compared to Bandhan.
Despite this higher volatility, both funds have the same Sharpe ratio of 0.40. The Sharpe ratio measures the excess return earned per unit of risk, and an identical Sharpe ratio indicates that, despite its higher volatility, the Quant Large & Mid Cap Fund compensates investors for the additional risk at a rate comparable to the Bandhan Core Equity Fund. This balance suggests that investors in the Quant fund are rewarded with returns that justify the higher level of risk, making it an attractive option for those willing to accept more market fluctuation for potentially higher returns.
Examining the Sortino ratio, which specifically measures downside risk by focusing only on negative volatility, the Quant Large & Mid Cap Fund has a slightly higher Sortino ratio of 0.83 compared to the Bandhan Core Equity Fund's 0.81. A higher Sortino ratio indicates that the Quant fund is more efficient in generating returns relative to its downside risk. This means that, although the Quant fund is more volatile overall, it has managed to protect investors from significant losses better than the Bandhan Core Equity Fund.
For investors, this slight edge in downside risk management could make the Quant fund more appealing, particularly in turbulent market conditions where minimizing losses is crucial.
Remember, this comparison is just to give you an idea about the risk profile of the two best large & mid cap mutual funds. Consider your risk tolerance and investment goals to determine which fund aligns better with your investment strategy.
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Top Holdings of the Schemes:
While both Quant Large & Mid Cap Fund and Bandhan Core Equity Fund invest predominantly in the large & mid-cap segment, their specific holdings and sector allocation reveal some key differences:
| Quant Large & Mid Cap Fund |
Bandhan Core Equity Fund |
| Company |
% Assets |
Company |
% Assets |
| Reliance Industries Ltd. |
9.33 |
ICICI Bank Ltd. |
4.96 |
| ITC Ltd. |
8.38 |
HDFC Bank Ltd. |
4.31 |
| Aurobindo Pharma Ltd. |
7.84 |
Reliance Industries Ltd. |
3.56 |
| Samvardhana Motherson International Ltd. |
6.02 |
Infosys Ltd. |
3.36 |
| Treasury Bills |
5.96 |
Axis Bank Ltd. |
2.48 |
| IRB Infrastructure Developers Ltd. |
5.56 |
Bharti Airtel Ltd. |
2.22 |
| Container Corporation Of India Ltd. |
5.35 |
Zomato Ltd. |
1.94 |
| Life Insurance Corporation of India |
5.29 |
Maruti Suzuki India Ltd. |
1.89 |
| Adani Power Ltd. |
5.03 |
Interglobe Aviation Ltd. |
1.81 |
| JIO Financial Services Ltd. |
3.99 |
Signatureglobal (India) Ltd. |
1.69 |
Data as of August 08, 2024
Do note past performance is not an indicator of future returns
The securities quoted are for illustration only and are not recommendatory.
(Source: ACE MF, data collated by PersonalFN Research)
Quant Large & Mid Cap Fund has a concentrated approach in its top holdings, with significant allocations in major companies like Reliance Industries Ltd. (9.33%) and ITC Ltd. (8.38%). These large-cap stalwarts provide the fund with a strong foundation of stability and consistent performance.
Additionally, the presence of Treasury Bills (5.96%) and infrastructure-focused investments such as IRB Infrastructure Developers Ltd. (5.56%) and Container Corporation of India Ltd. (5.35%) indicates a strategic mix of stability and growth. This diversified allocation across various sectors like pharma, infrastructure, and FMCG provides a balanced risk-reward profile, helping the fund capitalize on both defensive and cyclical growth opportunities.
In contrast, the Bandhan Core Equity Fund adopts a more diversified approach in its top holdings, with a focus on financial services and technology. The largest allocation is to ICICI Bank Ltd. (4.96%), followed by HDFC Bank Ltd. (4.31%), indicating a strong tilt towards the financial sector.
The fund's exposure to Axis Bank Ltd. (2.48%) and Bharti Airtel Ltd. (2.22%) further strengthens its financial and telecommunications holdings, while companies like Zomato Ltd. (1.94%) and Interglobe Aviation Ltd. (1.81%) reflect an inclination towards emerging sectors such as digital services and aviation. This sector allocation suggests that Bandhan Core Equity Fund is positioning itself to capture growth in India's expanding middle class and the ongoing digital transformation.
Overall, Quant's top holdings reveal a strategic focus on a mix of large-cap stability and high-growth sectors, making it potentially more resilient during market downturns, while Bandhan's diversified sector allocation, particularly in financials and technology, aims to leverage India's economic growth and technological advancement.
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Expense Ratio of the Schemes
When comparing mutual funds, the Expense Ratio, which represents the annual fee charged, plays a crucial role in determining your returns. Here's a quick breakdown of Quant Large & Mid Cap Fund vs Bandhan Core Equity Fund:
| Scheme Name |
Direct Plan Expense Ratio |
Regular Plan Expense Ratio |
| Quant Large & Mid Cap Fund |
0.61% |
1.88% |
| Bandhan Core Equity Fund |
0.71% |
1.85% |
Data as of August 08, 2024
Do note past performance is not an indicator of future returns
The securities quoted are for illustration only and are not recommendatory.
(Source: ACE MF, data collated by PersonalFN Research)
As you can see, Quant Large & Mid Cap Fund has a significantly lower expense ratio for direct plans. Even a small percentage point difference can accumulate over time and impact your returns. Whereas, Bandhan Core Equity Fund has a slightly lower ratio in the regular plan as compared to Quant.
A higher expense ratio could have an impact on the investor's actual returns and thus, investors may consider Quant Large & Mid Cap Fund for a direct plan and Bandhan Core Equity Fund for the regular plan, as a cost-effective option. Remember, a lower expense ratio translates to potentially higher returns over time, but a lower expense ratio should not be the only factor to be considered while investing in sectoral funds.
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Suitability of Investors to the Schemes:
Both Quant Large & Mid Cap Fund and Bandhan Core Equity Fund are suitable for investors looking for a diversified portfolio of large & mid-cap stocks. It's ideal for investors with a moderate risk appetite. The fund offers an opportunity for investors to invest in blue chip & emerging companies, providing a balanced approach to capital appreciation and stability.
Quant Large & Mid Cap Fund is well-suited for investors with a higher risk tolerance who are seeking aggressive growth and are comfortable with market volatility. This fund's consistent outperformance, especially over the long term, suggests that it excels in capturing both stability from large-cap stocks and significant growth potential from mid-cap stocks.
The fund's strong CAGRs over three, five, seven, and ten years indicate its capability to generate substantial returns for investors willing to stay invested over a long period, making it an excellent choice for those with long-term financial goals such as retirement planning or wealth accumulation.
Bandhan Core Equity Fund is more suitable for investors who seek a balance between growth and stability but with a slightly more conservative approach. While the Bandhan Core Equity Fund has also delivered impressive returns, particularly in the short term, its performance across longer time horizons, while solid, is somewhat less aggressive than that of the Quant fund.
This fund may appeal to investors who prioritize consistency and want exposure to the large and mid-cap segments without taking on excessive risk. Its conservative strategy is reflected in its slightly lower CAGRs over extended periods, which could suit those with medium to long-term investment horizons who are looking for steady growth with less exposure to market volatility.
The Bandhan Core Equity Fund's inclusion of small-cap stocks may appeal to investors who are comfortable with higher risk and are looking for higher growth opportunities. In contrast, the Quant Large & Mid Cap Fund's exclusion of small caps and heavier reliance on large-caps suggests a more risk-averse strategy, catering to investors who prefer a more stable growth trajectory.
Both funds cater to different investor profiles, making it crucial for individuals to align their choices with their risk tolerance, investment goals, and time horizons.
To conclude...
Choosing the right mutual fund for a Systematic Investment Plan (SIP) can significantly impact the growth of your investment portfolio. Both the Quant Large & Mid Cap Fund and the Bandhan Core Equity Fund have established themselves as strong contenders in the equity mutual fund space, each offering unique advantages and catering to different investor preferences.
Whether you choose the aggressive growth potential of the Quant Large & Mid Cap Fund or the stability of the Bandhan Core Equity Fund, a disciplined SIP approach will help you build wealth over time and achieve your long-term financial objectives. As always, conducting thorough research and considering your suitability is crucial before making any investment decision.
Ultimately, the best choice of large & midcap funds depends on your investment horizon and goals. Consulting a SEBI-registered financial advisor can be invaluable to ensure optimal alignment with your specific investment objectives. Remember, a well-diversified portfolio across market caps/sectors and asset classes may help manage overall risk while potentially benefiting from its growth potential.
Disclaimer: PersonalFN does not receive any monetary compensation from the fund house or scheme names stated in the article.
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MITALI DHOKE is a Research Analyst at PersonalFN. She is an MBA (Finance) and a post-graduate in commerce (M. Com). She focuses primarily on covering articles around mutual funds including NFOs, financial planning and fixed-income products. Mitali holds an overall experience of 4 years in the financial services industry.
She also actively contributes towards content creation for PersonalFN’s social media platforms in the endeavour to educate investors and enhance their financial knowledge.
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.
This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes.