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Large & Mid-cap Funds – Definition, Five Best Funds & Should You Invest?

Highlights

  • Large & mid-cap funds invest in stocks of both large and mid-cap companies
  • But which large & mid-cap funds should you choose to invest in? Check the list of top performers here and decide accordingly.

When investing in equity mutual funds, an investor is often faced with the dilemma of large vs mid vs small-cap funds. Investing in the right type of fund is very important to achieve your goals. Large & mid-cap are a type or category of equity funds, let us understand these more.

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What are Large & Mid-cap Funds?

Large & mid-cap funds are those equity funds that invest a minimum 35% in large-cap & mid-cap stocks individually. This means both large & mid-cap stocks combined should be at least 70% of the portfolio. The rest 30% can be allocated partially or fully in large or mid-cap stocks basis the fund manager’s discretion and view on markets. If a fund manager has a view that large-cap will do better than mid-cap, he/she will be inclined to invest a majority of this 30% in large-cap stocks. The advantage of large and mid-cap funds is that these are diversified in nature and give you the best of both large & mid-cap stocks in one fund. Otherwise, to have both large and mid-cap funds in your portfolio, you will have to invest in them separately. Let us see which are the best large and mid-cap funds.

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Five Best Large & Mid-cap Funds

Canara Robeco Emerging Equities Fund

This fund is offered by Canara Robeco Mutual Fund. Below are the key features of this fund:

  • This fund was launched on 11th March 2005 and manages an AUM of INR 4,788 crores.
  • It has delivered an annualized return of 15.37% since launch.
  • The fund is rated five stars by Value Research.
  • The portfolio currently has 53 stocks with 55% in large-caps and 45% in mid-caps
  • The top five stocks in the portfolio are Reliance Industries, HDFC Bank, ICICI Bank, Bharti Airtel and Atul Industries.

DSP Equity Opportunities Fund

This fund is offered by DSP Mutual Fund. Below are the key features of this fund:

  • This fund was launched on 16th May 2000 and manages an AUM of INR 4,343 crores.
  • It has delivered an annualized return of 16.28% since launch.
  • The fund is rated three stars by Value Research.
  • The portfolio currently has 67 stocks with 53% in large-caps and 47% in mid-caps
  • The top five stocks in the portfolio are ICICI Bank, HDFC Bank, Bharti Airtel, Coromandel Industries and Reliance Industries.

Kotak Equity Opportunities Fund

This fund is offered by Kotak Mutual Fund. Below are the key features of this fund:

  • This fund was launched on 9th Sep 2004 and manages an AUM of INR 3,009 crores.
  • It has delivered an annualized return of 16.69% since launch.
  • The fund is rated four stars by Value Research.
  • The portfolio currently has 52 stocks with 50% in large-caps and 50% in mid-caps
  • The top five stocks in the portfolio are Reliance Industries, HDFC Bank, ICICI Bank Coromandel Industries and Hindustan Unilever.
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Mirae Asset Emerging Bluechip Fund

This fund is offered by Mirae Mutual Fund. Below are the key features of this fund:

  • This fund was launched on 9th July 2010 and manages an AUM of INR 8,808 crores.
  • It has delivered an annualized return of 18.08% since launch.
  • The fund is rated five stars by Value Research.
  • The portfolio currently has 59 stocks with 51% in large-caps and 49% in mid-caps
  • The top five stocks in the portfolio are HDFC Bank, Reliance Industries, ICICI Bank, Axis Bank and Infosys.

Principal Emerging Bluechip Fund

This fund is offered by Principal Mutual Fund. Below are the key features of this fund:

  • This fund was launched on 12th Nov 2008 and manages an AUM of INR 1,782 crores.
  • It has delivered an annualized return of 21.66% since launch.
  • The fund is rated four stars by Value Research.
  • The portfolio currently has 56 stocks with 48% in large-caps and 52% in mid-caps
  • The top five stocks in the portfolio are HDFC Bank, Reliance Industries, ICICI Bank, Divi’s Labs and Bharti Airtel.

Returns of Large & Mid-cap Funds

The table below shows the returns delivered in % terms by these funds across regular plans:

Fund NameLast 1 YearLast 3 YearsLast 5 YearsLast 7 Years
Canara Emerging-4.691.998.5920.87
DSP Equity Opp.-5.341.927.1313.59
Kotak equity-4.862.266.7913.63
Mirae Emerging-2.404.8611.8822.45
Principal Emerging-4.831.097.3217.73

The last three years, especially the last year, has not been good for equity funds in general with large & mid-cap funds being no exception. But if you look at the long term returns, large & mid-cap funds have done well. This underscores the point about investing in equity with a long term horizon in mind. Markets & fund returns can be volatile in the short-term.

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Should You Invest in Large & Mid-cap Funds?

When investing in equity funds, large & mid-cap funds are a good option since these funds provide you allocation to both large and mid-cap stocks in one portfolio. A combination of good quality large and mid-cap stocks in a portfolio is an ideal mix to generate market-beating returns. Also, the flexibility to invest 30% in either large & mid-cap provides a cushion to the fund manager to deliver higher returns. Many investors like to invest in large & mid-cap stocks by investing separately in pure large & pure mid-cap funds. One can do that as well or just invest in large & mid-cap funds. We recommend investing a part of your equity portfolio in these funds. Our top recommendation is Mirae Asset Emerging Bluechip which has been the most consistent fund and has the right risk & return metrics. In case you intend to invest in large and mid-cap funds separately, you can read other posts of ours to know the best large & mid-cap funds individually.

Best mid-cap fundshttps://www.wishfin.com/mutual-fund/five-best-performing-mid-cap-funds-to-invest-in/

Best large-cap fundshttps://www.wishfin.com/mutual-fund/three-best-large-cap-mutual-funds/

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