In mutual fund investing, especially when you have plans to hold a scheme for a long time, two things can prove to be critical in determining your success — the rating of the fund and its expense ratio. These parameters are especially crucial in large-cap funds. Returns in large-cap funds are often closer across schemes because they invest in similar top companies. So, a lower expense ratio can significantly improve net returns, and a high rating helps assess consistency.
In this article, we will discuss five such large-cap funds which are top rated (4 or 5 stars) in 2025 and which also have the lowest expense ratio. Such funds can become a means of better returns for investors in the long term.
It is not easy to decide which of the hundreds of funds to choose every year. But if you pay attention to two things — the fund’s rating and its expense ratio — then this decision can be quite easy.
Why is rating important?
Rating is just like the reviews we see when we buy a product. Mutual funds are also rated in a similar way, which is based on factors like past performance, risk, and the ability of the fund manager. Usually 4 or 5 star funds mean that the fund has performed well and can be expected to do so in the future as well.
Also read: HDFC mutual funds: 5 top-performing SIP plans with up to 21% annualised returns in 10 years
The lower the expenses, the higher the profit
Now let’s talk about the expense ratio. It is the fee that the fund house charges you every year. This fee is deducted from your investment. Initially, this amount seems small, but when you invest in a fund for 10-15 years, this small fee can turn into a saving or loss of lakhs of rupees.
Suppose you have chosen two funds whose returns are almost equal. But the expense of one is 1% and the other is just 0.5%. So think, whose return will be higher in 15 years? The answer is clear — the fund with low expenses.
When good rating and low fees come together
Funds that are top rated and have low expenses also indicate the smartness of fund management. This means that those funds are capable of giving good returns at low expenses. Data is sourced from Value Research.
So now which funds are the best?
We have compiled a list of five large-cap funds that are the highest rated (4 or 5 stars) in 2025 and have the lowest expense ratio as compared to other funds. These funds are not only performing well today, but can also grow your money in the future.
5 top-rated largecap funds with lowest expense ratio in 2025
1. Canara Robeco Bluechip Equity Fund – Direct Plan
Rating: 4-star
Expense Ratio: 0.48%
Returns: The large-cap fund has delivered 19.63% annualised returns in 3 years, 23.94% in 5 years, and 14.94% in 10 years.
2. ITI Large Cap Fund
Rating: 4-star
Expense Ratio: 0.61%
Returns: The fund, launched in December 2020, has generated 19.01% annualised returns in 3 years. Its return since launch has been 15.76%.
3. Kotak Bluechip Fund
Rating: 4-star
Expense Ratio: 0.62%
Returns: The fund’s 3-year, 5-year and 10-year annualised returns have been 19.5%, 25.29% and 13.96%, respectively.
4. Edelweiss Large Cap Fund
Rating: 4-star
Expense Ratio: 0.63%
Returns: The fund has given investors annualised returns of 20.03% in 3 years, 25% in 5 years and 13.62% in 10 years.
5. Mahindra Manulife Large Cap Fund
Rating: 4-star
Expense Ratio: 0.66%
Returns: The annualised returns in this fund have been 18.3% in 3 years and 24.56% in 5 years. Its 10-year return is not available as the fund is just 6 years old.
(Data: Value Research)
Also read: 5 Equity Mutual Funds with Low Expense Ratio
Remember, these are historical returns and do not guarantee that the fund will deliver similar performance in the future.
Summing up…
While investing, do not just run after returns. Look at the quality of the fund and the expenses incurred on it. Because when you choose wisely, the money also grows wisely.
