Large and Mid Cap Funds: Balanced Growth Investment

What is a Large and Mid-Cap Mutual Fund?

A Large and Mid-Cap Mutual Fund is an equity fund that invests its portfolio in a mix of Large and Mid-Cap stocks and securities to gain from long-term market growth.

Advantages of Large and Mid-Cap Mutual Funds

Growth potential

Being equity-oriented, Large and Mid-Cap Mutual Funds offer a good growth potential for long-term investors.

Portfolio diversification

As the fund invests in securities across two market caps, you benefit from a diversified portfolio investing in both Large and Mid-Cap stocks.

Professional management

Large and Mid-Cap Mutual Funds are actively managed schemes wherein experienced portfolio managers manage the portfolio.

Exposure to Different Growth Cycles

Investing in both large and mid-cap stocks allows participation in the growth phases of both stable, established leaders and potentially higher-growth, emerging companies.

Large and Mid-Cap Funds Returns Calculator

REGULAR INVESTMENT

SIP

Invest systematically in regular amounts and build a corpus with a disciplined investing habit.

ONE TIME INVESTMENT

Lump sum

Invest once with the facility of lump sum investing and save at your will. Time the market correctly and earn good returns.

INVEST AMOUNT

PERIOD

RETURNS

Total Amount Invested

₹ 0

after 30 years you will get a return of

₹ 0

Disclaimer: Projections/estimations is backtested using historical data.

TARGETED RETURN VALUE

INVESTMENT PERIOD

RETURNS

Total Amount Invested

₹ 0

after 30 years you will get a return of

₹ 0

Disclaimer: Projections/estimations is backtested using historical data.

ABCD - One app to build a diversified

Invest in mutual funds online with the ABCD app and build your portfolio one click at a time.

A choice of different types of mutual fund schemes
Online investments with a fully integrated digital platform
Facility to switch, redeem and invest more from a single platform

Download our mobile app now

PLAY STORE

APP STORE

Scan the QR code to download our Mobile App

Download our mobile app now

PLAY STORE

APP STORE

Understanding Large and Mid-Cap Funds

Table of Contents

What are Large and Mid-Cap Funds?What are the features of Large and Mid-Cap Funds?What is the meaning of market capitalisation?What should be the investment horizon for Large and Mid-Cap Funds?What is the tax implication of Large and Mid-Cap Funds?What are the payout options?

What are Large and Mid-Cap Funds?

Large and Mid-Cap Mutual Funds are equity schemes which combine securities across large and Mid-Cap market capitalisation. It offers a wider portfolio diversification so that investment risks are reduced.

What are the features of Large and Mid-Cap Funds?

Actively managed equity mutual funds
Good combination of mid-cap returns and large cap security
Suitable for investors with a long-term investment horizon
Invest through SIPs or lump sum
Earn tax-free returns up to ₹1 lakh if you stay invested

What is the meaning of market capitalisation?

Market capitalisation means the total value of a company’s shares

The total number of listed shares is considered for calculation

The current market value is taken to calculate the market cap

Formula -
Market capitalisation = total number of outstanding shares X current market value per share

What should be the investment horizon for Large and Mid-Cap Funds?

Large and Mid-Cap funds have a high risk profile
They are prone to short-term volatility and negative investment returns
To avoid short-term volatility, a long-term investment horizon is recommended
A long-term horizon also helps earn attractive investment returns as large and Mid-Cap companies grow
You also get a tax benefit on staying invested for a longer tenure

What is the tax implication of Large and Mid-Cap Funds?

Returns up to ₹1 lakh are tax-free if you stay invested for 12 or more months
Returns exceeding ₹1 lakh are taxed at 10%
For redemption within 12 months, returns are taxed at 15%
Dividends earned, if any, are taxed at your income tax slab rate

What are the payout options?

Dividend option

Earn dividends on your investment at regular intervals
Growth option

Accumulate the returns over the investment tenure and get a lump sum amount on redemption

FAQs On Large and Mid-Cap Funds

Which type of fund is suitable for you depends on your investment goals, risk tolerance, and investment horizon. Each type has its benefits.

While large-cap funds help you avoid risk to a larger extent by investing in established company stocks, mid-cap funds carry relatively higher risk with more volatility and higher return potential. If you opt for Large & Mid-Cap Funds, you adopt a middle-ground strategy where you have the low-risk factor of the large-cap component plus the growth potential of the mid-cap component.

Large & Mid-Cap Funds are risky because of the balance between the volatility of mid-cap stocks and the relative stability of large-cap stocks. These funds can be lucrative if you invest wisely based on your investment horizon, risk appetite, and specific financial goals.

The minimum investment limit for Large & Mid-Cap Funds can vary based on the specific fund and the fund house. Generally, you can start a SIP in a large & mid-cap fund for as low as ₹100 and a lumpsum investment for as low as ₹1000.

At any point, investing for any financial goal depends on time horizon and risk tolerance. For education funding, consider the following.

• The ideal investment horizon for Large & Mid-Cap Funds is considered 5+ years. If your course starts in 5 years, consider diversifying your portfolio with other investments.
• If you have a low-risk tolerance, adding bonds should make your portfolio more conservative.
• Get a proper estimate of the amount you need for your education. If it’s time-sensitive, focus on capital preservation more than on aggressive growth.
• Ensure you have a fully safe, highly liquid emergency fund available. Relying completely on investments with the slightest risk would not be a wise option.

No, the allocation of Large & Mid-Cap Funds that go into large-caps and mid-caps is up to the fund manager , subject to a minimum of 35% for each category as per SEBI guidelines. The fund manager is free to pick a variety of funds within the specific category. Hence, the fund's past performance would be a good sign to look out for before investing, although not indicative or reliable.

If you are particular about your allocations, you can choose to invest separately in large-cap and mid-cap funds so that you have the freedom to create your portfolio.