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.
Large & Midcap Funds to Invest in (SIP Returns)
| Funds | 1-year Return | 3-year Return | 5-year Return | 10-year Return |
|---|---|---|---|---|
| DSP Equity Opportunities Fund | 15.45% | 7.17% | 9.97% | 13.17% |
| Mirae Asset Emerging Bluechip Fund | 15.50% | 10.34% | 14.17% | - |
| Principal Emerging Bluechip Fund | 9.62% | 4.14% | 8.99% | 16.20% |
Large & Midcap Funds to Invest in (Lump Sum Returns)
| Funds | 1-year Return | 3-year Return | 5-year Return | 10-year Return |
|---|---|---|---|---|
| DSP Equity Opportunities Fund | 16.89% | 8.76% | 11.39% | 12.84% |
| Mirae Asset Emerging Bluechip Fund | 17.55% | 12.36% | 16.84% | - |
| Principal Emerging Bluechip Fund | 9.36% | 8.00% | 12.50% | 15.64% |
Top-performing Multi-cap Funds to Invest in (SIP Returns)
| Funds | 1-year Return | 3-year Return | 5-year Return | 10-year Return |
|---|---|---|---|---|
| Aditya Birla Sun Life Equity Fund | 8.18% | 5.05% | 8.90% | 13.46% |
| ICICI Prudential Multi-cap Fund | 5.77% | 5.65% | 8.22% | 12.35% |
| SBI Magnum Multicap Fund | 13.52% | 8.05% | 10.19% | 13.85% |
Top-performing Multi-cap Funds to Invest in (Lump Sum Returns)
| Funds | 1-year Return | 3-year Return | 5-year Return | 10-year Return |
|---|---|---|---|---|
| Aditya Birla Sun Life Equity Fund | 10.86% | 7.18% | 10.82% | 12.62% |
| ICICI Prudential Multi-cap Fund | 7.90% | 7.04% | 9.60% | 12.44% |
| SBI Magnum Multicap Fund | 18.43% | 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)
| Funds | 1-year Return | 3-year Return | 5-year Return | 10-year Return |
|---|---|---|---|---|
| Axis Focused 25 Fund | 23.38% | 13.53% | 14.03% | - |
| Motilal Oswal Multicap 35 Fund | 15.18% | 7.25% | 11.21% | |
| SBI Focused Equity Fund | 18.72% | 12.21% | 12.49% | 15.97% |
Top-performing Focused Funds (Lump Sum Returns)
| Funds | 1-year Return | 3-year Return | 5-year Return | 10-year Return |
|---|---|---|---|---|
| Axis Focused 25 Fund | 22.31% | 14.49% | 14.04% | - |
| Motilal Oswal Multicap 35 Fund | 18.94% | 9.28% | 14.46% | |
| SBI Focused Equity Fund | 21.02% | 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”.