5 Best Large & Mid Cap Funds to Invest in 2018
SEBI has recently introduced 5 broad and 36 sub-categories for the mutual funds. The circular laid also described the characteristics of each of the schemes, wherein Large & Midcap Funds were defined as the ones which are open-ended schemes with investments in both large and mid-cap stocks.
Here, you will first find out more about this new animal of the mutual fund market and then learn about various top-performing funds that fall in this category. So without any further delay, let’s get started!
What Are Large & Mid Cap Funds?
Large & Mid Cap Funds are basically equity schemes which invest at least 35% in large-cap stocks and at least 35% in mid-cap stocks. In precise, they can be considered as multi-cap funds in a new avatar.
Did You Know?
- 13 of the total Large & Mid Cap Schemes were multi-cap funds before re-categorization. Besides, there were three large-cap funds, and five among them were mid-cap schemes.
- There are total 21 schemes which are re-categorized into this category of Large & Mid Cap Funds.
Who Should Invest in Such Funds?
There are several schemes in this category which were large-cap, mid-cap, or multi-cap schemes earlier. Some of them were performing excellently due to the investment strategy build by their respective fund managers. If you, being a new investor, finds the fund manager’s view attractive, then investment in that particular scheme is a good choice. With around 35% asset allocation in mid-cap stocks, the risk will be little higher than that found in pure large-cap schemes. The investors with a moderately high-risk appetite can bet in this new category of mutual funds.
If there exists a fund in your portfolio which has recently been converted to as a large & mid-cap fund or you are already an investor in one of the schemes prior re-categorization, then do not exit until you see some serious change in the strategy. In many instances, it’s perceived that even though the official categorization of the scheme is changed, there is no significant change in the strategy. In all such cases, staying invested is recommended.
Top Recommended Large & Mid Cap Funds 2018
- Mirae Asset Emerging Bluechip Fund (G)
One of the finest schemes from the bucket of Mirae Asset Mutual Funds, this fund is a true bluechip holder. With an investment of around 35% in large-cap companies and the rest in mid-cap stocks, it is holding an assets worth Rs. 5,351 crore as on June 30, 2018. Mirae Asset Emerging Bluechip Fund selects the candidates for its portfolio which generate operating profits of approximate Rs. 100 crores. It consciously avoids tiny businesses or micro cap companies. Though quality conscious, it avoids the temptation to chase quality at any price. This is one of the key factors contributing to its consistency. - Canara Robeco Emerging Equities Fund (G)
The primary quality of the fund is consistency which makes it distinctive from all others on the list. The investment approach that it follows is growth at a reasonable rate to pick up the companies for investment. It looks for opportunities across various sectors. Canara Robeco Emerging Equities Fund has 40% invested in large and mid-cap stocks. It has outperformed its category by 5-17 percentage points and the benchmark by 6-16 percentage points in the 3 and 5-year returns. It gave 18.21% (annualized) return since its inception in 2005. A SIP of ₹5,000 per month in this fund which started five years ago is worth ₹5.60 lakhs now. - DSP BlackRock Equity Opportunities Fund (G)
Being quite a steady performer in its category, DSP BlackRock Equity Opportunities Fund of DSP BR MF has retained a three-star rating almost for the last 13 years, climbing to four stars in the past one year. It is biased towards large-cap stocks, wherein the exposure is around 60%, with mid-cap stocks exposure to 37% in all. It doesn’t cling to either of the investment styles, be it growth or value investing. The key points which the fund managers consider to pick a stock include the growth potential of the business, confidence in the predictability of business variables, return on equity, management quality, and stock valuation. An excellent fund for conservative investors with assets base of Rs. 5400 crores. - Sundaram Large & Mid Cap Fund (G)
The investment strategy of this fund is a mix of top-down and bottom-up approach with a focus on absolute returns with a healthy blend of MNCs’ stocks. It invests 50-60% in large caps and 40-50% in mid and small caps. Sundaram Large & Mid Cap Fund has outperformed its category and benchmark by around 4-8 and 3-5 percentage points, resp., in the 1, 3 and 5-year returns. The fund has given 11.12% (annualized) return since its inception in 2007. A SIP of ₹5,000 monthly in this fund started five years ago is worth ₹4.80 lakhs now. - Invesco India Growth Opportunities Fund (G)
Invesco India Growth Opportunities Fund aims to generate capital appreciation from a diversified portfolio which predominately include Equity and Equity Related Instruments of large as well as mid-cap companies. It is currently being managed by two of the most talented fund managers of the AMC, i.e., Mr. Amit Ganatra and Taher Badshah. It was launched on August 09, 2007 and has S&P BSE 250 Large MidCap TRI as its benchmark.
Let’s check out the past 1, 3, and 5-year returns of the funds along with the risk that they attract.
Experts’ Take: Things to Consider While Investing
As this new equity category is positioned between the two major categories, i.e., large-cap and mid-cap categories, investment in such funds will not be uniform as in the case of multi-cap funds. It could pit funds with varying risk profiles where some can be more tilted towards mid-caps while others in large-caps. Thus, an investor should do a lot of homework before finalizing a fund from this category. The recently shifted funds who were proving their guts with their clearly defined processes, sound investment strategy, and exceptional returns will perform the similar way irrespective of the change in category.
For any help regarding investments in this category funds or guidance on SIP investments in India, connect with the online experts associated with us.
