Best Large & Mid Cap Mutual Funds to Invest in 2022 – Top Performing Large & Mid Cap Mutual Funds in India

Sep 21, 2022

Listen to Best Large & Mid Cap Mutual Funds to Invest in 2022 – Top Performing Large & Mid Cap Mutual Funds in India

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Large & Mid-Cap Fund is a relatively new category of equity mutual funds that offers you an opportunity to create wealth by investing in an optimum mix of large-cap and mid-cap stocks, i.e., the leaders of today as well as the future leaders. Thus, you benefit from the stability of large-caps and the high growth potential of mid-caps through a single fund.

Which are the best Large & Mid Cap Mutual Funds to invest in 2022?

There are a total of 27 Large & Mid Cap Mutual Funds in India, and their combined average net asset under management (AUM), as of August 31, 2022, stands at Rs 1,22,886 crore.

Examples of Large & Mid Cap Mutual Funds in India

AUM data as of August 31, 2022
(Source: ACE MF)
 

But which are the best Large & Mid Cap Mutual Funds to invest in 2022? That is precisely what we will be answering in this article.

We at PersonalFN have shortlisted the three best Large & Mid Cap mutual funds for 2022. But before we reveal our list of best Large & Mid Cap Funds for 2022, here are some basic details about the category.

What are Large & Mid Cap Mutual Funds?

Large & Midcap Funds are equity-oriented funds that are mandated to invest a minimum of 35% of their assets each in equity and equity-related instruments of large-cap and mid-cap companies. In other words, these funds invest at least 70% of their assets in the top 250 companies in terms of market capitalisation.

The fund manager/s can decide where the remaining capital needs to be allocated based on how the market is performing or expected to perform.

Best Large & Mid Cap Mutual Funds to Invest in 2022 – Top Performing Large & Mid Cap Mutual Funds in India
Image source: www.freepik.com - photo created by Freepik
 

What are the advantages of investing in Large & Mid Cap Mutual Funds?

If you have a look at the past market data, you will find that performance across large-caps and mid-caps differs significantly over any given period - sometimes large-caps outperform while other times it could be mid-caps. Hence, diversifying investment across large-cap and mid-cap stocks can generate better risk-adjusted returns.

While large-caps are known to provide stability across market cycles, their potential to generate very high returns is limited. On the other hand, mid-caps can outpace large cap returns over the long run though they can be highly volatile in the short term.

By investing in large & midcap funds, you can benefit from the steady return capability of large-caps and high growth potential of mid-caps, at a reasonable degree of risk, provided you select the best funds in the category.

Top stock holdings of Large & Mid Cap Funds

AUM data as of August 31, 2022
(Source: ACE MF)
 

What are the risks involved in investing in Large & Mid Cap Mutual Funds?

Since Large & Mid Cap Mutual Funds invest in equities, they are prone to market fluctuations. With predominant exposure to both large-cap and mid-cap stocks, these funds are riskier than pure Large Cap Funds but less risky than pure Mid Cap Funds and Multi Cap Funds that invest across market capitalisation. This means Large & Mid Cap Funds can offer better returns than Large Cap Mutual Funds, albeit at a slightly higher risk.

To mitigate the risk, it is advisable to opt for the Systematic Investment Plan (SIP) mode when you invest in Large & Mid Cap Funds.

[Must Read: Best Mutual Funds for SIP]

Who should invest in Large & Mid Cap Mutual Funds?

If you are seeking stability of Large Cap Funds but do not want to miss out on the high-growth potential of Mid Cap Funds, then Large & Mid Cap Fund can form a part of your core equity mutual fund portfolio. Ensure that you have a high-risk appetite, the appetite to bear the impact of short-term volatility, and a long-term investment horizon of at least 5 years.

 

How are Large & Mid Cap Mutual Funds taxed?

Large & Mid cap mutual funds are equity-oriented mutual funds, and hence they follow equity taxation. The short-term holding period for Large & Mid Cap Mutual Funds from a tax perspective is 12 months. So, if you sell your Large & Mid Cap Fund units before 12 months, you pay short-term capital gains (STCG) tax of flat 15% on the gains.

On the other hand, if you sell your Large & Mid Cap Fund units after completing one year, you pay a long-term capital gains tax of 10% with indexation, but only if your gains exceed Rs 1 Lakh in a financial year. If your long-term gains are below Rs 1 Lakh and you redeem after completing one year, then you do not have to pay any tax on these gains.

Let us now take a look at the three best Large & Mid Cap Mutual Funds to invest in 2022.

List of Best Large & Mid Cap Mutual Funds to Invest in 2022

Scheme Name Returns (%)
Absolute CAGR
1 Year 2 Years 3 Years 5 Years 7 Years
Canara Rob Emerging Equities Fund 2.00 28.64 26.16 13.90 17.27
Mirae Asset Emerging Bluechip Fund -0.81 28.84 25.42 15.52 19.15
Kotak Equity Opportunities Fund 6.24 28.68 24.08 13.77 15.60
Past performance is not an indicator for future returns
Data as of September 19, 2022
(Source: ACE MF)
 

Best Large & Mid Cap Mutual Fund to Invest in 2022 #1: Canara Robeco Emerging Equities Fund

Canara Robeco Emerging Equities Fund is one of the popular schemes in the Large & Midcap Fund category that carries a successful track record of over 17 years to its credit. The fund endeavours to identify and invest in companies having the potential to grow as big or even bigger than their global counterparts. Over the last five years, Canara Robeco Emerging Equities Fund has generated compounded annualised returns (CAGR) of around 13.9%, compared to 13.4% CAGR generated by its benchmark Nifty LargeMidcap 250 - TRI index.

Top portfolio holdings of Canara Robeco Emerging Equities Fund

Data as of August 31, 2022
(Source: ACE MF, PersonalFN Research)
 

As of August 31, 2022, Canara Robeco Emerging Equities Fund held a well-diversified portfolio of 58 stocks diversified across market caps and sectors. The fund held its top exposure in large-cap names like ICICI Bank, HDFC Bank, Reliance Industries, Infosys, and SBI. Canara Robeco Emerging Equities Fund's portfolio is skewed towards Financials, followed by Engineering, Auto & Auto Ancillaries, Infotech, Consumption, and Chemicals, among others.

Performance across market phases of Canara Robeco Emerging Equities Fund

Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase
Scheme Name 09/Mar/09 To 05/Nov/10 05/Nov/10 To 20/Dec/11 20/Dec/11 To 03/Mar/15 03/Mar/15 To 25/Feb/16 25/Feb/16 To 14/Jan/20 14/Jan/20 To 23/Mar/20 23/Mar/20 To 19/Sep/22
Canara Rob Emerging Equities Fund 117.84 -23.47 45.69 -15.62 20.23 -32.11 45.08
Category Average 80.72 -25.51 30.64 -17.34 16.59 -34.79 44.42
Nifty LargeMidcap 250 - TRI 93.97 -30.87 30.59 -19.66 17.17 -37.65 48.13
Past performance is not an indicator for future returns
Data as of September 19, 2022
(Source: ACE MF, PersonalFN Research)
 

Canara Robeco Emerging Equities Fund has not only outperformed the benchmark and its peers across bull market rallies but has also fared well in the bear market phases. With this, the fund has managed to consistently generate superior returns across most market cycles it has witnessed so far.

Click here to read our detailed analysis on Canara Robeco Emerging Equities Fund.

Best Large & Mid Cap Mutual Fund to Invest in 2022 #2: Mirae Asset Emerging Bluechip Fund

Launched in July 2010, Mirae Asset Emerging Bluechip Fund is the largest and most popular scheme in the Large & Midcap fund category. The fund looks to combine the stability of large-caps along with the growth of select emerging mid-sized companies which have the potential to become the future bluechips. By generating returns at a CAGR of 15.5% in the last 5-year period, Mirae Asset Emerging Bluechip Fund has outperformed the benchmark by around 2 percentage points in compounded returns.

Top portfolio holdings of Mirae Asset Emerging Bluechip Fund

Data as of August 31, 2022
(Source: ACE MF, PersonalFN Research)
 

As of August 31, 2022, Mirae Asset Emerging Bluechip Fund held a well-diversified portfolio of around 69 stocks spread across market capitalisation, with prominent large-cap names such as ICICI Bank, HDFC Bank, Axis Bank, Infosys, and SBI appearing among its top holdings. Financial Services dominate Mirae Asset Emerging Bluechip Fund's portfolio along with diversification to Pharma, Infotech, Engineering, and Consumption, among others.

Performance across market phases of Mirae Asset Emerging Bluechip Fund

Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase
Scheme Name 09/Mar/09 To 05/Nov/10 05/Nov/10 To 20/Dec/11 20/Dec/11 To 03/Mar/15 03/Mar/15 To 25/Feb/16 25/Feb/16 To 14/Jan/20 14/Jan/20 To 23/Mar/20 23/Mar/20 To 19/Sep/22
Mirae Asset Emerging Bluechip - -19.43 44.27 -9.93 23.35 -36.29 47.36
Category Average 80.72 -25.87 30.88 -17.16 16.80 -34.65 44.42
Nifty LargeMidcap 250 Index - TRI 93.97 -30.87 30.59 -19.66 17.17 -37.65 48.13
Past performance is not an indicator for future returns
Data as of September19, 2022
(Source: ACE MF, PersonalFN Research)
 

Mirae Asset Emerging Bluechip Fund has developed a commendable track record since its inception and has been successful in delivering superior returns across market cycles. It has not only managed to deliver massive returns in the bull periods but also considerably restricted losses in the bear periods.

Click here to read our detailed analysis on Mirae Asset Emerging Bluechip Fund.

Note: Fresh lumpsum subscription is currently suspended in Mirae Asset Emerging Bluechip Fund. Fresh registration via SIP is allowed for a maximum of up to ₹2,500/- per month, per PAN.

Best Large & Mid Cap Mutual Fund to Invest in 2022 #3: Kotak Equity Opportunities Fund

Launched in September 2004, Kotak Equity Opportunities Fund is primarily an opportunities-style fund that looks for investment opportunities across various sectors based on the performance and growth potential of companies within the sectors. In the last 5 years, Kotak Equity Opportunities Fund has generated a compounded annualised return of around 13.8%, which is nearly at par with the returns delivered by its benchmark Nifty LargeMidcap 250 - TRI.

Top portfolio holdings of Kotak Equity Opportunities Fund

Data as of August 31, 2022
(Source: ACE MF, PersonalFN Research)
 

As of August 31, 2022, Kotak Equity Opportunities Fund held 62 stocks in its portfolio, with names such as ICICI Bank, SBI, Reliance Industries, SRF, and L&T among its top portfolio holdings. Kotak Equity Opportunities Fund's portfolio is skewed towards Banking & Finance and Engineering sector, while Consumption, Infotech, Auto Ancillaries, and Pharma are among the other core sectors in the fund's portfolio.

Performance across market phases of Kotak Equity Opportunities Fund

Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase Bear Phase Bull Phase
Scheme Name 09/Mar/09 To 05/Nov/10 05/Nov/10 To 20/Dec/11 20/Dec/11 To 03/Mar/15 03/Mar/15 To 25/Feb/16 25/Feb/16 To 14/Jan/20 14/Jan/20 To 23/Mar/20 23/Mar/20 To 19/Sep/22
Kotak Equity Opportunities Fund 81.45 -25.81 29.24 -18.12 19.03 -34.31 43.73
Category Average 80.72 -25.87 30.88 -17.16 16.80 -34.65 44.42
Nifty LargeMidcap 250 Index - TRI 93.97 -30.87 30.59 -19.66 17.17 -37.65 48.13
Past performance is not an indicator for future returns
Data as of September 19, 2022
(Source: ACE MF, PersonalFN Research)
 

Kotak Equity Opportunities Fund has done reasonably well during bull market rallies and has also managed to limit downsides during bear market phases. It has the potential to reward investors well over complete market cycles.

Click here to read our detailed analysis on Kotak Equity Opportunities Fund.

This completes our list of the three best Large & Mid Cap Mutual Funds to invest in 2022. The only thing left to do now is to invest in these best Large & Mid Cap Funds and reap the dual benefit of market leaders of today and emerging leaders.

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At PersonalFN, we apply a host of qualitative and quantitative parameters using our proprietary S.M.A.R.T score matrix.

S - Systems and Processes

M - Market Cycle Performance

A - Asset Management Style

R - Risk-Reward Ratios

T - Performance Track Record

The stringent process has helped our valued mutual fund research subscribers to own some of the best mutual fund schemes in their investment portfolio with a commendable long-term performance track record. PersonalFN's service is apt if you are looking for insightful guidance and recommendations on some worthy funds having high growth potential in the years to come.

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Warm Regards,
Divya Grover
Research Analyst



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