Large & Mid Cap Mutual Funds: Large & Mid Cap Mutual Funds primarily invest their corpus in large and mid-cap stocks. According to SEBI regulations, these are open-ended equity schemes that allocate at least 35% of their total assets to large-cap companies and another 35% to mid-cap stocks.
However, this definition doesn’t tell the complete story of this category. For example, the mandatory 35% allocation to mid-cap stocks adds an element of risk. That said, these funds are less risky compared to pure mid-cap schemes, which invest about 65% of their corpus in mid-caps. Similarly, the 35% allocation to large-cap stocks provides some stability but makes them riskier than pure large-cap funds. The remaining 30% of the corpus is where things get interesting.
The fund manager has the discretion to decide where to invest the remaining portion. If large-cap stocks seem attractive, the allocation may shift toward them. If mid-cap and small-cap stocks appear promising, the manager might lean toward those. This flexibility means the risk level of these schemes can vary based on the market outlook and the manager’s decisions.
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Understand in Simple Language
If all this sounds confusing, let’s simplify it. These schemes are suitable for aggressive investors who are comfortable investing in mid-cap stocks. The proportion of large-cap and mid-cap stocks in these funds depends on market conditions and the fund manager’s strategy. Therefore, you should only consider these funds if you are willing to take on some extra risk.
That said, don’t stress too much about this type of investing. Before SEBI introduced the categorization of mutual funds, most equity mutual funds already invested significantly in both large-cap and mid-cap stocks. Especially during bull markets, many funds allocated a large portion to mid-cap stocks, with some even venturing into small-cap stocks for higher returns.
According to mutual fund advisors, these schemes will evolve over time. Some funds may lean more toward large-cap stocks, while others may favor mid-cap stocks. This will make it easier for investors to choose schemes based on their risk tolerance. For instance, if you’re looking for more stability, you can opt for funds that are biased toward large-cap stocks. On the other hand, aggressive investors may prefer funds with a heavier allocation to mid-cap stocks.
If you have a long-term investment horizon and are willing to take on a bit of extra risk, you can consider investing in our recommended large & mid-cap schemes.
Best Large & Mid Cap Mutual Funds to Invest in November 2024:
- Axis Growth Opportunities Fund
- Mirae Asset Large & Midcap Fund (SIP capped at ₹25,000)
- Canara Robeco Emerging Equities Fund
- Sundaram Large and Midcap Fund
- Kotak Equity Opportunities Fund
- Quant Large & Mid Cap Fund
