3 Best Large and Midcap Funds to Invest in 2025: Expert Picks

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Are you eager to refresh your portfolios for the New Year 2025? If yes, here is a good alternative for you to consider, introducing the Best Large and Mid Cap Funds in 2025. How? Let's get into that.

It has been an exciting year for large & midcap mutual funds; with the Nifty large midcap 250 index delivering an impressive return of 17.7%, it emerged as one of the top-performing equity mutual funds in 2024.

But the question remains, will this consistency continue in the new fiscal year 2025?

In this analysis, you will explore the 3 best large & Midcap funds for 2025, carefully handpicked by MF analysts. So, if you're looking for a fund that blends stability with growth, you’re in the right place.

Let’s start by fully understanding the large and mid cap funds meaning for you.

What are Large and Mid Cap Funds?

The large and midcap funds fall under the Equity Mutual Funds category that mainly invests in the large & mid-sized companies. They put at least 35% of their money into the top 100 large and established companies and at least 35% into medium-sized companies ranked 101 to 250. So, 70% of the fund is mostly invested in these big and medium companies. The rest 30% is invested in the fund as per the fund manager’s convictions or calls. These funds promise to offer a balance between the stability of large companies and the growth potential of mid-sized ones.

Moving on, the next heading will help you gather if large and midcap funds are a good investment for 2025 or not.

Is it Good to Invest in a Large and Midcap Fund in 2025?

Investing in a best Large and Midcap Fund in 2025 can be a good option, but it's important to be cautious and manage your expectations.

According to the reports, the Indian equity market showed strong growth in 2024, driven mainly by intense selling by foreign institutional investors) with a rise in domestic investors. Mid and small-cap stocks performed really well, whereas large-cap stocks also contributed to the overall market rally.

However, the market experts suggest that in 2025, you can see the mid and small-cap stocks might give different high returns because their prices are already quite high and many stocks are trading above their intrinsic or actual value.

So, while these stocks were great performers in the past, can you expect multi-bagger returns from the large and midcap mutual funds in 2025?

You see, India’s long-term growth potential is still strong and there are still opportunities in the market. Large and Midcap Funds are a good way to balance your investments because they allow you to invest in both large, stable companies and medium-sized companies with higher growth potential.

If the market experiences a downturn, large-cap stocks will give stability and reduce the risk in your portfolio. On the other hand, if the market continues to grow, the mid-cap stocks could help you earn good returns. So, even though there might be some caution around mid and small-cap stocks in 2025, investing in a Large and mid cap fund can still be a smart choice for balancing risk and potential rewards.

Curious to know the top-performing large and midcap funds? Here is a list to start your systematic investments today.

Which are the Best Large and Mid Cap Mutual Funds for 2025?

Here are the 3 best large and midcap funds to invest via SIP in 2025:

1. ICICI Prudential Large and Mid Cap Fund

This fund, started in July 1998, keeps its major investments in the top market leaders and emerging stocks with strong fundamentals. This means it has a focused eye on the growing high-potential sectors. Since 2021, the ICICI Prudential Large and Mid Cap Fund has consistently outperformed its benchmark, giving better returns while managing risk effectively. It's a great choice for investors who want a balanced mix of stability and growth in their investments.   

This gave you a brief about the fund's investment style; let's see some numbers to back our theory:

On a rolling return basis in the last 3 years, ICICI Pru Large and Midcap Fund has given a 15.31% return benchmarked against a 16.78% return. Though the fund has slightly underperformed over the last 5 years, it still shows steady growth, it is a reliable choice for long-term investors looking for consistent returns in the long term.

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2. Quant Large and Mid Cap Fund

This fund has a dynamic nature, which means it keeps on changing while using a quantitative approach to select high growth, momentum stocks, a specialty of Quant Mutual Fund.

Now, how will a best large and midcap fund give you multi-bagger returns? It's simple: using a unique investment style called the VLRT framework, it selects stocks based on valuations, liquidity, risk, and timing. This active strategy, combined with a high turnover rate of 300-400%, has helped the fund consistently outperform its benchmark, delivering strong long-term returns.  

Let’s take the help of the below bar graph to analyse the data more easily:

In the last 3 years, Quant Large & Mid Cap Fund's high growth of 26.93% returns outstandingly, beating its benchmark of 21.18%. Likewise, with a 20.66% return in the last 5 years, again outperforming its benchmark, shows its capability to deliver consistent returns and a solid track record for you to consider the large and mid cap funds for your portfolio.

3. Invesco India Large and Mid Cap Fund

This fund combines the top-down and bottom-up investment approaches by identifying companies that lead in the sectors. The aim is to deliver consistent returns to derive steady returns for the long term. Let's check the returns with the help of a bar graph:

On a rolling return basis, the Invesco India Large & Mid Cap Fund has given a 16.69% return very close to the benchmark returns of 16.78% in 3 years time frame.

Are you worried about the dynamic nature of mutual funds? Worry not as you got it covered. For regular updates about the funds on your WhatsApp, Click Here. 

Worried about the heavy taxes? Check out how much tax you are going to pay on your investments in the next heading.

What Tax is Levied on the Large & Midcap Funds?

As per the Union Budget 2024-25, the new income tax slabs were presented by the finance minister, Nirmala Sitaraman. Here is how STCG and LTCG will be taxed:

1. Short-Term Capital Gains (STCG): If you sell your Large & Midcap Mutual Funds units before 12 months, the gains will be taxed at 20% (previously 15%).
2. Long-Term Capital Gains (LTCG): If you sell your units after 12 months, the gains will be taxed at 12.5% (previously 10%), but only if the gains exceed Rs.1.25 Lakh in a financial year.

Important Read: Taxation on Mutual Fund Comparison Old vs New Tax Regime

Are you sure if it’s the right investment choice? See the below points to know the suitability of this category for you.

Who Should Invest in a Large and Midcap Fund?

Here is a quick check to know if large and mid cap funds suit you or not:

Investors seeking stability

If you want the stability of large companies but also want to benefit from the growth potential of mid-sized companies, these Mutual Funds are a perfect match for you.

High-risk appetite

If you are comfortable with some short-term ups and downs in the market, the large and mid cap funds will be an addition to your portfolio.

Long-term horizon

These funds are best suited if you plan to stay invested for at least 5 years to ride out market fluctuations and fully benefit from potential growth.

Core portfolio allocation

If you aim to add a balanced blend of large and mid-cap stocks to the main part of your equity portfolio.

Summary

To wrap up, the above-filtered 3 best large and mid cap mutual funds for 2025 have been analyzed by the experts and have passed through every parameter, making these a valuable addition via a systematic investment plan or SIP for your portfolio. Why wait? Grab this excellent opportunity to create long-term wealth now.