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Best Large and Mid-Cap Funds to Consider Investing in 2022

08 June 2022

Large and Mid-Cap Funds are securities that can be purchased by retail investors. 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 companies.

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 large 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.

Large-cap, mid-cap, and small-cap, funds in India are expected to grow by 20% in 2022, according to a recent report. The main reason for this growth has been due to 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.

Best Large and Mid-Cap Funds to Invest in 2022

S.No.

Mutual Fund

1.

Axis Growth Opportunities Fund

2.

Mirae Asset Emerging Bluechip Fund

3.

Canara Robeco Emerging Equities Fund

4.

Sundaram Large and Midcap Fund

5.

Kotak Equity Opportunities Fund

6.

Invesco India Growth Opportunities Fund

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 important to have a clear understanding before you invest. Here are some factors that you should consider before investing:

1. Risk Profile

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

2. Investment Horizons  

You should also consider how long you plan on holding your investments when choosing between large-cap, mid-cap funds, and small-cap funds. If your investment horizon is short—for example, 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 of time than large or mid-cap funds do due to their higher risk profiles (see above). If your investment horizon is longer than two years then it may make sense to invest in large or mid-cap funds due to their lower volatility over longer periods. 

3. Fund History

You should always research the history of any fund before investing. You should pay close attention to factors such as how well the fund has performed over time, whether or not its assets have been increasing or decreasing over time, and what kind of returns it has been generating for investors.

4. Returns Offered

Returns offered by Large and Mid-Cap funds are very attractive. These funds have a long track record of offering above-average returns. However, before investing in any fund, you must do your due diligence and pick a good fund. Look at the returns offered by the fund over a period of 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 or not.

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 have a big impact on your returns. There are three types of taxes that 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 or not. If it performs better than its benchmark, it is considered to be a good investment; if it performs worse than its benchmark, it might not be as good an investment as you thought it was going to be.

Best Large and Mid-Cap Funds: Performance Overview

  • Axis Growth Opportunities Fund

Axis Growth Opportunities Fund (AXG) is a mutual fund with a focus 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 across the country. 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 and 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 sectors such as industrial, financial services and consumer goods.

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 offers investors an opportunity 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 sectors such as financial services, information technology, infrastructure, manufacturing, and distribution.

The investment objective of the scheme 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 as compared to other comparable companies or benchmark indices.

Conclusion

Investing in large and mid-cap funds in India in 2022 will be a great way to diversify your portfolio. Large and mid-cap fund managers have the ability to invest across the entire economy, which means they can take 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: The views expressed in this post are that of the author and not those of Groww.

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Research Analyst - Bavadharini KS

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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