Should You Invest in Top 5 Large and Mid Cap Funds: The country’s top 5 large and mid cap mutual funds have made their investors rich by giving bumper returns of 52 percent to 59 percent in the last one year. So should you invest in these? Or is it better to stay away from them? Which investors are these funds suitable for? We will know the answers to all these questions later, but first let us know what is the meaning of Large and Mid Cap Mutual Funds. We will also look at the last one year’s returns and their expense ratio of those top 5 funds which we have mentioned above.
What are Large and Mid Cap Funds?
Large & Mid Cap Mutual Funds invest a major part of their total corpus in large and mid cap stocks. According to SEBI’s definition, it is necessary for these schemes to invest at least 35% of their total assets in large cap companies and 35% in mid cap companies. This means that these schemes are neither completely large cap nor completely mid cap, but an interesting mix of both. Both types of stocks play different roles in this fund. Investing in large cap stocks i.e. big companies provides stability. Whereas investing in mid-cap or medium-sized companies may be comparatively more risky, but there is also a hidden possibility of getting higher returns and excellent growth in the long term.
Also read: UPI Lite New Rules: Important changes in the facility of UPI Lite, maximum limit of transaction and wallet increased.
Performance of Top 5 Large and Mid Cap Funds
Top 5 large and mid cap funds have performed brilliantly in the last 1 year. These are the funds which have had the highest returns in the last one year:
1. Motilal Oswal Large and Midcap (Direct Plan)
– One year return: 59.64%
– Expense ratio: 0.54%
2. Invesco India Large & Mid Cap (Direct Plan)
– One year return: 58.27%
– Expense ratio: 0.64%
3. Quant Large & Mid Cap (Direct Plan)
– One year return: 53.48%
– Expense ratio: 0.61%
4. Bandhan Core Equity (Direct Plan)
– One year return: 53.12%
– Expense Ratio: 0.65%
5. ICICI Pru BSE Midcap Select ETF
– One year return: 52.92%
– Expense Ratio: 0.15%
Also read: Tata MF NFO: What is special in the new scheme of Tata Mutual Fund, who can invest in the country’s first Nifty Capital Market Index Fund?
Should one invest in these funds or not?
Large and mid cap funds are suitable for investors who are willing to take higher risk and want to take advantage of both the stability of large caps and the growth potential of mid caps. If you are an aggressive investor and are ready to take more risk in the hope of better returns, then large and mid cap funds can be a great option for you. But, if you prefer safe investments, then you should choose schemes that invest in large companies (large cap), which can give more stable returns.
Also read: Big Returns on SIP: This large cap scheme created a fund of Rs 1 crore with SIP of just Rs 3200, what is the investment strategy
Risk appetite and investment period
Also keep in mind that these funds are suitable only for those investors who are prepared to invest for a long term i.e. at least 5 years and are not afraid of market fluctuations. Like any equity fund, the past performance of large and midcap funds cannot be considered as a guarantee of similar returns in future. Returns may fluctuate depending on market conditions. Therefore, keep your risk tolerance and long-term goals in mind before investing.
(Disclaimer: The purpose of this article is only to provide information, not to advise investment in any fund. Equity mutual funds are directly affected by the ups and downs of the stock market. Take investment decisions after taking the advice of your investment advisor.)
