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Difference Between Large & Midcap Fund and Multi-cap Fund

Highlights

  • Large & Midcap Fund vs Multi-cap Fund - Which should you opt for?
  • Multi-cap funds beat large & mid cap funds in terms of diversification
  • But on the return front, large & midcap funds can go past multi-cap funds by having more quality stocks in the portfolio

Large and Midcap funds invest in equity and equity-related instruments of large and mid-cap companies. Whereas, multi-cap funds invest in all large, mid and small-cap companies. Large, mid and small-cap companies occupy top 100, 101-250 and 251-500 spots, respectively, according to market capitalization.

Investing in more stocks makes multi-cap funds win over large & midcap funds in terms of diversification. However, large & midcap funds can have more quality stocks than their multi-cap counterparts, resulting in greater returns for those investing in the former. This makes the selection between the two interesting for investors. You can thus read this post and decide which to choose to bolster your investment portfolio.

Risk Appetite You Need to Have to Invest in Large & Midcap Fund and Multi-cap Fund

As large & midcap funds invest in a select bunch of large and mid-cap stocks, investors need to possess a high risk appetite as the portfolio concentration is limited. Whereas, investors even with moderate risk appetite can find it comfortable investing in a multi-cap fund. The greater exposure of assets gives investors the extra cushion that they will require in case the broader market goes through a sustained bearish run.

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Large & Midcap Funds to Invest in (SIP Returns)

Funds1-year Return3-year Return5-year Return10-year Return
DSP Equity Opportunities Fund15.45%7.17%9.97%13.17%
Mirae Asset Emerging Bluechip Fund15.50%10.34%14.17%-
Principal Emerging Bluechip Fund9.62%4.14%8.99%16.20%

Large & Midcap Funds to Invest in (Lump Sum Returns)

Funds1-year Return3-year Return5-year Return10-year Return
DSP Equity Opportunities Fund16.89%8.76%11.39%12.84%
Mirae Asset Emerging Bluechip Fund17.55%12.36%16.84%-
Principal Emerging Bluechip Fund9.36%8.00%12.50%15.64%

Top-performing Multi-cap Funds to Invest in (SIP Returns)

Funds1-year Return3-year Return5-year Return10-year Return
Aditya Birla Sun Life Equity Fund8.18%5.05%8.90%13.46%
ICICI Prudential Multi-cap Fund5.77%5.65%8.22%12.35%
SBI Magnum Multicap Fund13.52%8.05%10.19%13.85%

Top-performing Multi-cap Funds to Invest in (Lump Sum Returns)

Funds1-year Return3-year Return5-year Return10-year Return
Aditya Birla Sun Life Equity Fund10.86%7.18%10.82%12.62%
ICICI Prudential Multi-cap Fund7.90%7.04%9.60%12.44%
SBI Magnum Multicap Fund18.43%9.51%12.21%12.25%

Within multi-cap funds, there are focused funds that have delivered substantially large numbers. But they are not as diversified as their fellow multi-cap peers. The reason being the portfolio of these funds is concentrated to a maximum of 30-35 stocks. But if you want to check their returns, you can do so in the table below.

Top-performing Focused Funds (SIP Returns)

Top-performing Focused Funds (Lump Sum Returns)

Funds1-year Return3-year Return5-year Return10-year Return
Axis Focused 25 Fund22.31%14.49%14.04%-
Motilal Oswal Multicap 35 Fund18.94%9.28%14.46%
SBI Focused Equity Fund21.02%11.89%12.68%18.09%

Note – Data sourced from Value Research as of October 30, 2019

Disclaimer – “Mutual fund investments are subject to market risks. Please read the scheme related documents carefully before investing”.