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How large and mid-cap mutual funds operate and which schemes are most productive and profitable for you to opt for in December.
What determines a large-cap fund?(Photo Credit: Instagram)
Large and mid-cap mutual funds are open-ended equity schemes that invest a minimum of 35 per cent of total assets in large-cap companies and a minimum of 35 per cent of the total assets in mid-cap stocks, according to the SEBI guidelines.
While a 35 per cent investment in mid-cap stocks gives a risky outlook to these funds, they are certainly safer than pure mid-cap schemes that take 65 per cent of your total assets and put them in mid-cap stocks. Such stocks also gain stability through their 35 per cent large-cap investments. However, the question remains for large and mid-cap mutual fund investors, where to allocate the remaining 30 per cent of their corpus?
What Happens To That Portion?
The remaining corpus in the hands of the fund manager goes where that entity’s experience and anticipation of the market trends take it. If the fund manager thinks the large-cap bracket is the more attractive one, they will opt for the large-cap stocks. If they foresee the mid and small-cap stocks are set to take off in the coming period, they may put in the remaining 30 per cent in them. These investments directly influence the risk attached to a scheme.
Such investments are often ripe for aggressive investors who are willing to invest in mid-cap stocks. Before SEBI introduced the categorisation of mutual funds, most equity mutual funds used to invest in large-cap and mid-cap schemes. The trait was especially evident during the bull market, when schemes used to have a large allocation of funds in mid cap stocks. Some even used to invest in small cap stocks.
These schemes evolve over a period of time and undergo various market trends and fluctuations. A scheme may be inclined towards large-cap stocks, while others could lean towards the mid-cap stocks. Depending on their risk tolerance, this classification makes it easier for investors to proceed. If you have a lesser risk appetite and seek a margin of safety, according to mutual fund advisors, it is better to go for large-cap stocks. Aggressive and long-term players may tilt in favour of mid-cap stocks.
Best large & mid-cap mutual funds to invest in December 2025:
Axis Large & Mid Cap Fund
Mirae Asset Large & Midcap Fund (SIP capped at Rs 25,000)
Canara Robeco Large & Mid Cap Fund
Sundaram Large & Midcap Fund
Kotak Large & Midcap Fund
Quant Large & Mid Cap Fund
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December 08, 2025, 16:36 IST
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