With the re-categorization of mutual fund schemes, a new category of mutual funds emerged- the Large and Mid Cap Fund.

The system that SEBI has now evolved has 36 categories of mutual funds.

The basic idea of categories is that one can divide funds into different buckets based on investment usages and characteristics.

Also Read: Best Small and Mid-Cap Funds of 2018

Best Large and Mid Cap Funds for 2018

As the name suggests this category of funds, invest mostly in large and mid-size companies. Here are the top 5 Large and Mid Cap Funds for 2018.

1. Principal Emerging Bluechip Fund

This is one of the best large and mid-cap fund to invest in 2018. It is an open-ended fund and carries a very high risk. However, this fund has proven to give decent returns and its return since launch is 23.81%.

Return per annum of Principal Emerging Bluechip Fund:

Duration Returns
1 year 9.9%
3 years 16.4%
5 years 29.9%
Since launch 23.81%

 Key Information 

Launch Date 01 January 2013
NAV (26 July 2018) ₹113.1
Plan Type Direct
Rating by Groww 5 Star
AUM (Fund Size) ₹1,625 Cr
Riskometer very High
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark NIFTY Large Midcap 250 TRI since its launch.
Age of the fund 5 years old
Expense Ratio 1.31%
Exit Load If redeemed bet. 0 Year to 1 Year; Exit Load is 1%;
Type  Open Ended

Analysis 

This five-star fund has crossed its benchmark by a large margin since its launch.

The fund hunts for companies with good growth prospects and return ratios over the next two to three years.

It looks for firms with a good management track record and also trades at attractive valuations. It specifically scouts for stocks owned by institutions.

The fund typically parks 40% each in large-caps and mid-caps, with a residual small-cap allocation. In recent times, it has been overweight on large-caps, relative to the category.

2. Mirae Asset India Equity Fun

It is a fund with moderately high risk and has given a return of 19.18% since its launch.

Returns per annum Mirae Asset India Equity Fun:

Duration Returns
1 year 9.0%
3 years 13.9%
5 years 22.9%
Since launch 19.18%

Key information 

Launch Date 01 January 2013
NAV (26 July 2018) ₹50.4
Plan Type Direct
Rating by Groww 5 Star
AUM (Fund Size) ₹7,945 Cr
Riskometer Moderately High
Minimum SIP ₹1,000
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark S&P BSE 200 TRI since its launch.
Age of the fund 5 years old
Expense Ratio 1.32%
Exit Load If redeemed bet. 0 Year to 1 Year; Exit Load is 1%;
Type  Open Ended

Analysis 

The scheme aims to maximize long-term capital appreciation by finding investment opportunities resulting from Indian economic growth and investing in equity and equity related securities.

The investment philosophy of the fund is to invest in quality companies.

It hunts for companies run by professional management.

3. Canara Robeco Emerging Equities

This is the best performing fund in large and mid-cap fund category. It is a fund with high risk and has given a return of 25.87% since its launch.

Returns per annum of Canara Robeco Emerging Equities:

Duration Returns
1 year 9.8%
3 years 16.6%
5 years 33.8%
Since launch 25.87%

Key Information 

Launch Date 01 January 2013
NAV (26 July 2018) ₹100.2
Plan Type Direct
Rating by Groww 5 Star
AUM (Fund Size) ₹3,506 Cr
Riskometer Moderately High
Minimum SIP ₹1,000
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark S&P BSE 200 TRI since its launch.
Age of the fund 5 years old
Expense Ratio 0.89%
Exit Load If redeemed bet. 0 Year to 1 Year; Exit Load is 1%;
Type  Open Ended

Analysis 

This fund has been given a rating a five-star rating.

It is a sector-agnostic fund, which looks out for opportunities across sectors with a bias towards mid-caps.

Its attempt is to identify companies which have the potential to become leaders of tomorrow in their respective sectors.

It uses growth at a reasonable price approach to pick companies which show consistent earning growth, higher than that of the market.

4. DSP BlackRock Equity Opportunities Fund

This fund has not performed well in the last 1 year. It is a fund with moderately high risk but has given a return of 17.35% since its launch.

Returns per annum of DSP BlackRock Equity Opportunities Fund:

Duration Returns
1 year 5.6%
3 years 13.4%
5 years 21.0%
Since launch 17.35%

Key information

Launch Date 01 January 2013
NAV (26 July 2018) ₹225
Plan Type Direct
Rating by Groww 5 Star
AUM (Fund Size) ₹5,400 Cr
Riskometer Moderately High
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has not consistently outperformed its benchmark NIFTY 50 Total Return since its launch.
Age of the fund 5 years old
Expense Ratio 1.10%
Exit Load If redeemed bet. 0 Year to 1 Year; Exit Load is 1%;
Type  Open Ended

Analysis 

The scheme aims to generate long-term capital appreciation. The secondary objective is income generation and distribution of dividend, from a portfolio constituted of equity and equity-related securities.

It is a flexi-cap fund with no pre-defined market capitalization limit. However, the fund has had a bias towards large caps.

In recent times, the fund has maintained a 70% plus large-cap exposure, with mid-cap stocks at about 20%.

5. Invesco India Growth Opportunities Fund

It is a fund with moderately high risk but has given a return of 17.35% since its launch.

Returns per annum of Invesco India Growth Opportunities Fund

Duration Returns
1 year 14.5%
3 years 13.2%
5 years 21.2%
Since launch 19.17%

Key Information 

Launch Date 01 January 2013
NAV (26 July 2018) ₹36.7
Plan Type Direct
Rating by Groww 5 Star
AUM (Fund Size) ₹672 Cr
Riskometer Moderately High
Minimum SIP ₹1,000
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark S&P BSE 250 Large MidCap TRI since its launch.
Age of the fund 5 years old
Expense Ratio 1.12%
Exit Load If redeemed bet. 0 Year to 1 Year; Exit Load is 1%;
Type  Open Ended

Analysis 

The scheme seeks to generate capital appreciation from a diversified portfolio of predominantly equity and equity related instruments of large and mid-cap companies.

Given the volatility in equity markets, it is crucial to be with large-sized companies because of their long-established presence in the organised part of the economy.

Therefore, mutual fund investors should consider Invesco India Growth Scheme, which largely focuses on such large companies.

What is Large and Mid Cap Fund Category?

At present, some large-cap schemes carry a sizable chunk of mid-cap stocks in their portfolios.

However, there are concerns that this ‘style drift’ puts investors at risk. That’s the main reason for introducing this new Large & Mid Cap equity fund category.

As per SEBI’s definition, Large and Mid Cap Fund Category has to invest minimum 35% in large cap and mid cap stocks each, while the rest can be invested either way.

Beyond 75%, a fund manager is free to vary the allocation.

Key Details:

Scheme type Equity scheme
Definition An open ended equity mutual fund investing in both large cap and mid cap stocks of Indian market
Asset allocation Minimum investment in equity & equity related instruments of large cap stocks – 35% of total assets and mid cap stocks – 35% of total assets

Investment style

If you consider the allocation, then it’s similar to a multi-cap fund.

The difference within these two categories is that multi-cap fund is not restricted to a strict allocation, between large and mid cap stocks.

The only condition is that it has to adhere is to invest minimum 65% in equity-related instruments.

Things to Remember.

Following the few important things you should always remember before investing in Mutual Funds :

1.Higher rates

Don’t blindly invest in the fund with the highest returns. Invest based on the duration you want to invest for.

Every person’s financial condition is different. Evaluate the funds you invest in yourself – don’t invest in a fund because of its popularity.

2. SIP 

Equity-oriented mutual funds are best for long-term investment tenure and through Systematic Investment Plan (SIP). 

SIP is a much better and safer option for investing in equity oriented mutual funds.

Direct plan for mutual fund gives you higher returns as compared to the regular plan of mutual fund schemes.

STP route is best for all those investors who wish to invest a lump sum in mutual fund schemes because this way they get the dual benefits of comparative risk investment.

Also Read: Daily SIP V/s Monthly SIP- Which One Should You Choose?

3.Review your investment

It is important you review your investment from time to time, but not too often. Once a few weeks is good enough.

Happy Investing!

Disclaimer: The views expressed in this post are that of the author and not those of Groww