Large & mid cap mutual funds primarily focus on investing in large and mid cap stocks. According to Sebi regulations, these funds must allocate a minimum of 35% of their total assets to large cap companies and another 35% to mid cap stocks.
However, this allocation does not paint the full picture of the large & mid cap category. The mandatory 35% investment in mid cap stocks adds a level of risk, although it is lower than that of pure mid cap schemes which invest around 65% in mid cap stocks. On the other hand, the 35% investment in large cap stocks provides some stability, but is riskier than pure large cap schemes. The remaining 30% of the corpus is left to the discretion of the fund manager, who may choose to invest in large cap, mid cap, or small cap stocks based on market conditions and their outlook.
Overall, large & mid cap schemes are suitable for aggressive investors who are willing to take on the extra risk associated with mid cap stocks. These schemes may vary in their exposure to large and mid cap stocks, allowing investors to choose based on their risk tolerance. For those seeking a higher margin of safety, schemes tilted towards large cap stocks may be more suitable, while aggressive investors may opt for schemes inclined towards mid cap stocks.
Before Sebi’s categorization of mutual funds, most equity mutual funds already invested in large and mid cap schemes, with many allocating heavily to mid cap stocks during bull markets. As these schemes evolve over time, investors will have more options to choose from based on their risk preferences.
For those looking to invest in large & mid cap mutual funds, here are some recommended schemes for July 2024:
– Axis Growth Opportunities Fund
– Mirae Asset Large & Midcap Fund
– Canara Robeco Emerging Equities Fund
– Sundaram Large and Midcap Fund
– Kotak Equity Opportunities Fund
– Quant Large & Mid Cap Fund
DailyBubble’s methodology for shortlisting these equity mutual fund schemes includes parameters such as mean rolling returns, consistency over the last three years, downside risk, outperformance measured by Jensen’s Alpha, and asset size. It is important to note that past performance does not guarantee future results, so investors should carefully consider their options before making any investment decisions. Welcome readers!
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