Best Large and Mid-Cap Funds to Invest in 2023

Large and Mid-Cap Funds are securities that retail investors can purchase. In India, they are regulated by SEBI. These funds invest in stocks of large and mid-cap companies across sectors, such as private equity, real estate, infrastructure, or technology.

In recent years, the Indian market has seen an increasing interest from investors. This can be attributed to several factors, such as the growth of the economy, positive reforms, and the current government’s focus on infrastructure. It is also due to investors’ confidence in the economy, which has led them to invest more in significant and mid-cap funds.

Large and Mid-Cap Funds in India have become popular due to their high returns on investment (ROI). They provide higher returns than small-cap funds because they invest in larger companies with lower volatility rates than small companies.

According to a recent report, Large-cap, mid-cap, and small-cap funds in India are expected to grow by 20% in 2023. The main reason for this growth has been increased spending on infrastructure projects, which has helped India become more competitive globally.

Additionally, the government has been trying to improve its tax regime by lowering corporate tax rates from 30% to 25%. This will make it easier for companies who want to expand into the country.

Top Large and Mid-Cap Funds to Invest in 2023

Here is a list of some of the best large and midcap fund 2023-

Factors to Consider Before Investing in Large and Mid-Cap Funds

Investing in a Large and Mid-Cap fund can be a lucrative business. However, it is essential to have a clear understanding before you invest.

Here are some factors that you should consider before investing-

1. Risk Profile

A large cap and mid-cap fund is less risky than a small-cap fund because it will invest in companies with a larger market capitalization.

The larger the company, its business model, revenue stream, and cash flows will be more stable. This means that your investment is less likely to lose money if you invest in a large or mid-cap fund than if you had invested in a small-cap fund. 

2. Investment Horizons  

When choosing between large-cap, mid-cap, and small-cap funds, it would be best to consider how long you plan to hold your investments.

For example, if your investment horizon is short—for instance, less than two years—then it may be better suited as an investment in small-cap funds because they tend to have higher returns over shorter periods than large or mid-cap funds do due to their higher risk profiles (see above).

If your investment horizon is longer than two years, investing in large or mid-cap funds may make sense due to their lower volatility over extended periods. 

3. Fund History

You should always research the history of any fund before investing.

In addition, you should pay close attention to factors such as how well the fund has performed over time, whether or not its investments have been increasing or decreasing, and what kind of returns it has generated for investors.

4. Returns Offered

Returns offered by Large and Mid-Cap funds are handsome. These funds have a long track record of providing above-average returns. However, before investing in any fund, you must do your due diligence and pick a good fund.

Look at the returns provided by the fund over some time.

This will help you understand what kind of returns this fund has been able to deliver in the past, which will help you decide if it is worth investing in this particular fund.

5. Tax Considerations

When you invest in Large and Mid-Cap Funds, you should be aware of the tax implications of the investment. You need to understand how your investments will be taxed since this can significantly impact your returns.

Three types of taxes may apply short-term capital gains tax, long-term capital gains tax and dividend distribution tax. The rate of tax that applies depends on how long you hold the fund and whether it is sold before or after the fund’s maturity date.

6. Benchmark

You should also consider the benchmark against which your fund is measured. The benchmark is used to determine whether an investment has performed well.

If it performs better than its benchmark, it is considered a good investment; if it performs worse than its benchmark, it might not be as good an investment as you thought it would be.

Best Large and Mid-Cap Funds: Overview

• Axis Growth Opportunities Fund

Axis Growth Opportunities Fund (AXG) is a mutual fund focusing on equity markets. The fund was launched in April 2018 and has been managed by Axis Mutual Fund for the past three years.

Axis Growth Opportunities Fund is a diversified equity fund managed by Axis Mutual Fund.

The objective of the Fund is to provide capital appreciation and income in the medium to long term. The Fund invests in stocks of companies operating in different sectors nationwide.

The investment advisor for the Fund is Axis Securities Limited, and its sub-advisor is Kotak Mahindra Asset Management Company Limited.

• Mirae Asset Emerging Bluechip Fund 

Mirae Asset Emerging Bluechip Fund is an open-end equity scheme of Mirae Asset Mutual Fund. The scheme was launched in July 2010.

It invests in stocks of companies that are listed on the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) and is classified as ‘Large & Mid Caps’ by the BSE.

It invests at least 80% of its assets in equity securities of Indian companies listed on these exchanges. It may invest up to 20% in other liquid funds, money market instruments, and fixed-income securities.

• Canara Robeco Emerging Equities Fund

Canara Robeco Emerging Equities Fund was launched in March 2005 and currently has a net asset value of Rs 144.0600. It is a diversified equity fund with exposure to companies operating in the emerging markets of Asia, Africa and Latin America.

The fund invests in companies across industrial, financial services and consumer goods sectors.

The fund intends to invest in companies that have a wide range of businesses, with the objective of spreading its risk across multiple sectors and markets. 

• Sundaram Large and Midcap Fund

The Sundaram Large and Midcap Fund is a diversified equity fund that invests in large-cap and mid-cap stocks.

The fund invests in stocks from all sectors, including banks, automobiles, consumer durable goods, pharmaceuticals, technology, oil and gas exploration and production, infrastructure development and construction, real estate development firms and services providers. 

The fund aims to generate returns through investments in stocks of high-quality companies with good fundamentals (low debt, high return on equity), strong balance sheets and solid earnings growth potential.

It also invests in promising start-ups with high growth potential and attractive valuations. The fund’s benchmark index is the NIFTY Large Midcap 250 Total Return Index. 

• Kotak Equity Opportunities Fund

The Kotak Equity Opportunities Fund is a diversified open-ended equity mutual fund managed by Kotak Mutual Fund. It was launched in 2004. The fund invests in a portfolio of equity and equity-related instruments listed on the Indian stock exchanges.

The fund manager aims to generate returns through capital appreciation, current income, and dividends from these investments. The fund may also invest in debt securities.

This fund allows investors to invest in a diversified portfolio of high-quality stocks from across sectors and markets at an attractive cost.

• Invesco India Growth Opportunities Fund

The Invesco India Growth Opportunities Fund, is a mutual fund managed by Invesco Asset Management Company Limited. The fund aims to provide long-term capital appreciation by investing in equity and equity-related securities of companies listed on the Indian stock exchanges.

The fund invests in financial services, information technology, infrastructure, manufacturing, and distribution sectors.

The scheme's investment objective is to generate superior returns by investing in a diversified portfolio of equity and equity-related instruments of companies that are expected to exhibit robust growth in their earnings per share over the medium to long-term horizon compared to other comparable companies or benchmark indices.

Conclusion

Investing in large and mid-cap funds in India in 2023 will greatly diversify your portfolio. Large and mid-cap fund managers can invest across the entire economy, taking advantage of opportunities that smaller companies might miss.

You can also expect greater transparency from these funds than what you’d get from an individual company.

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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Research Analyst - Bavadharini KS