What’s the Best Large and Mid Cap Funds for You?

What’s the Best Large and Mid Cap Funds for You?


The most common thought that comes to mind is where, when and how to choose funds to start investments. Mutual Funds provide a distributed range of schemes that give stable and good returns. Investors aiming to use a diverse investment approach can invest in Large and Mid Cap Funds. This scheme provides double the benefits of two categories with a single investment.

In this article, we will explore what this scheme means and the advantages of investment into it for the investors. This will be a complete guide to be able to make informed and right decisions regarding one’s investment on their own. Let’s start our research with an overview of this fund scheme.

Large and Mid Cap Funds: Overview & Benefits

These funds fall under the category of Equity Mutual Funds while offering multiple advantages to investors such as:

  • Large and Mid Cap Funds, regulated by SEBI, follow specific guidelines for asset allocation.
  • SEBI makes it compulsory with a minimum of 35% of assets in each in equity and equity-related securities. This is done in large and mid-sized companies.
  • This ensures diversification across companies of different sizes with the same portfolio.
  • At least 70% of the fund’s assets are invested in the top 250 companies by market capitalization.
  • The remaining 30% is at the choice of the fund manager. They adjust allocation depending upon the market conditions and investment objectives.
  • Typically, around 50-60% of assets are invested in large-cap stocks & 35-40% in mid-cap stocks.
  • Large-cap stocks provide stability and dividends, while mid-cap offers growth potential.
  • Fund managers play an important role in asset allocation, conducting proper research and making strategic decisions.
  • Investors benefit from access to a diversified portfolio managed by professionals.
  • This balanced allocation aims to achieve both capital preservation and appreciation.
  • It helps in aligning the diversified investor’s objective and maximizing the overall returns.

What are the characteristics of Large and Mid Cap Funds?

Market Capitalization Range

  • Large-cap funds primarily invest in companies with market capitalizations typically exceeding Rs.10 billion.
  • Mid-cap funds focus on companies with market capitalizations ranging from Rs.2 billion to Rs.10 billion.
  • This categorization reflects the companies’ standing within the broader market and is based on their size.

Stability vs. Growth Potential

  • Large-cap funds generally invest in well-established companies with stable earnings. Also strong market positions, and recognized brand names.
  • These companies often have diversified revenue streams and global operations. An established customer base, providing relative stability to investors.
  • In contrast, mid-cap funds invest in companies beyond the startup phase but still have significant growth potential.
  • Mid-cap companies may operate in emerging industries and possess innovative products or services. It targets new markets, offering opportunities for above-average growth. But also carries higher volatility compared to large-cap stocks.

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  • Both Large and Mid Cap Funds offer investors exposure to a diversified portfolio of companies across various sectors and industries.
  • By investing in a mix of large and mid-cap stocks, these funds provide built-in diversification. It reduces concentration risk compared to investing in individual stocks.
  • Diversification helps spread risk and can mitigate the impact of adverse events affecting any single company or sector within the portfolio.

Investment Strategy

  • Large and mid-cap funds may employ different investment strategies, depending on their objectives and the expertise of the fund managers.
  • Large-cap funds may focus on stable, dividend-paying companies with consistent earnings growth. It aims to provide investors with income and capital preservation.
  • Mid-cap funds may adopt a growth-oriented approach, seeking companies with higher growth potential.  It focuses on capital appreciation prospects, albeit with higher risk.
  • Fund managers actively manage portfolios, conducting research, and analyzing market trends. They make investment decisions to optimize returns while managing risk.


  • Large and mid-cap funds may exhibit different performance characteristics over various market cycles.
  • Large-cap funds tend to perform relatively well during periods of market stability or economic downturns due to the stability of the companies.
  • While mid-caps will outperform in the rising market creating more growth potential.

What are the ways through which we can invest in Large and Mid Cap Funds?

Investments made into mutual funds have one main goal which is to provide a simple means of investment. Here are two good ways through which investors can invest in this fund:

  • Systematic Investment Plan
  • Lumpsum investment

Investing is a crucial financial activity that helps individuals to achieve their long-term financial goals. There are two primary methods of investing – systematic investment plan and lump sum investment.

A systematic investment plan involves making regular investments in a fixed amount every month, which offers a disciplined and systematic approach to investing. It is an ideal investment option for individuals who want to start with a small amount and grow their savings over time.

On the other hand, lump-sum investment refers to investing a large amount of money in a single transaction. With this method, individuals can invest a considerable amount of money all at once, which is ideal for those who have a lump sum amount to invest.

Both of these investment methods are effective in their ways and can help individuals achieve their long-term financial goals. It is essential to select the right investment method depending on individual financial situations and goals.

Top 7 Best Large and Mid Cap Funds

The decision to invest requires the consideration of the investor’s objective, risk capacity and investing duration.

The filtration of the best fund scheme is based upon various well-thought-out aspects. Here is a ready-to-use list after conducting the proper analysis of those factors:

  • Axis Growth Opportunities Fund
  • HDFC Large and Mid Cap Fund
  • ICICI Pru Large & Midcap Fund
  • Kotak Equity Opportunities Fund
  • Quant Large & Midcap Fund
  • Mahindra Manulife Large & Mid Cap Fund
  • Motilal Oswal Large and Midcap Fund

Who should invest?

This scheme is suitable for various types of investors, The following are some of these:

Moderate Risk-Tolerant Investors

  • Large and mid-cap funds typically offer a balance between stability and growth potential. Making them suitable for investors with a moderate risk tolerance.
  • These funds invest in companies with established track records (large caps) as well as those with growth potential (mid-caps). It provides a diversified portfolio that helps in reducing risk.

Long-Term Investors

  • Investors with a long-term investment horizon may find large and mid-cap funds attractive due to their potential for capital appreciation over time.
  • These funds allow investors to participate in the growth potential of mid-cap companies while also benefiting from the stability and dividends offered by large-cap companies.

Investors Seeking Growth

  • Large and mid-cap funds are suitable for investors seeking growth opportunities in their portfolios.
  • Mid-cap companies often have higher growth potential compared to large-cap companies. While large-cap companies provide stability and dividends, creating a balanced approach to growth-oriented investing.


In conclusion, investing in Large and Mid Cap Mutual Funds offers investors a balanced approach to portfolio diversification, combining stability with growth potential. By making informed investment decisions. Investors can effectively grow their wealth over the long term with Large and Mid-Cap Funds, utilizing SIP as a strategic investment tool.

These funds cater to investors with moderate risk tolerance, long-term investment horizons, and those seeking growth opportunities. It gives a diversified portfolio of large and mid-cap companies, managed by experienced fund managers. So investors can align their investment objectives and maximize their overall returns. Investors need to conduct thorough research, assess their circumstances, and choose the appropriate funds that align with their financial goals and risk tolerance.



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