Large & Mid Cap Mutual Funds
Stability Meets Growth: Understand what large and mid cap funds are, how the SEBI 35 percent rule works, how they sit between large cap and mid cap funds, their risk, returns and taxation, and how to choose one.
What is a Large & Mid Cap Fund?
A large and mid cap fund is an equity mutual fund that invests in both large cap and mid cap companies in meaningful amounts. It aims to blend the stability of large caps with the growth potential of mid caps in one fund.
Per the Securities and Exchange Board of India (SEBI), a large and mid cap fund must hold at least 35 percent of its assets in large cap stocks and at least 35 percent in mid cap stocks at all times. That leaves the manager some freedom with the rest, but those two floors are fixed.
In plain terms: this category sits between a pure large cap fund and a pure mid cap fund. You get a steadier base than a mid cap fund, and more growth potential than a large cap fund, in a single holding.
Why Investors Choose Large & Mid Cap Funds
Balance of stability and growth
The large cap portion cushions falls, while the mid cap portion adds growth potential, so the ride is smoother than a pure mid cap fund.
Guaranteed mid cap exposure
The 35 percent mid cap floor means you always own mid caps, which can outgrow large caps over long periods.
One fund, two segments
Instead of holding a separate large cap and mid cap fund, you get both in one, with the split handled by the mandate.
Advice, not just access
IF you are unsure how a large and mid cap fund fits with your existing funds, THEN a Novelty Wealth adviser can check for overlap. NovaAI scores each fund on how consistently it beats its benchmark.
Large & Mid Cap Funds at a Glance
Large & Mid Cap vs Large Cap vs Mid Cap
Where this category sits on the risk and return scale
Large Cap
Top 100 companies only. The lowest volatility equity category and the steadiest of the three.
Large & Mid Cap
At least 35 percent large caps and 35 percent mid caps. A middle path between stability and growth.
Mid Cap
Companies ranked 101 to 250 only. Higher growth potential and sharper swings than a blended fund.
Risk, Return, and Who Large & Mid Cap Funds Suits
A large and mid cap fund carries more risk than a large cap fund, because the mandatory 35 percent mid cap allocation adds volatility. It is usually steadier than a pure mid cap fund, because the large cap portion cushions falls.
- IF you want mid cap growth but find a pure mid cap fund too volatile, THEN a large and mid cap fund is a gentler way to get that exposure.
- IF you already hold both a large cap and a mid cap fund, THEN a large and mid cap fund may overlap with them, so check before adding one.
- IF your horizon is at least five to seven years, THEN the mid cap portion has time to work through market cycles.
- IF you are close to a goal within two to three years, THEN this category may be too volatile.
Historical returns are not a promise of future returns. The mid cap portion raises both the growth potential and the size of drawdowns.
How to Choose a Large & Mid Cap Fund
Know the 35 percent floors
Every large and mid cap fund holds at least 35 percent large caps and 35 percent mid caps. That blend sets its risk level, so understand it before comparing.
Compare long-term performance
These funds are actively managed. Compare returns against the benchmark over three, five, and ten years, and favour consistency over one strong year.
Check the expense ratio
A lower Direct plan expense ratio protects long-term returns. Compare it across funds before deciding.
Check for overlap with your holdings
IF you already own large cap or mid cap funds, THEN a large and mid cap fund may repeat that exposure. Run a portfolio overlap check first.
How Are Large & Mid Cap Funds Taxed?
Large and mid cap funds are equity oriented schemes, so they follow equity taxation. If you sell units within 12 months, gains are Short Term Capital Gains (STCG), taxed at 20 percent. If you hold for more than 12 months, gains are Long Term Capital Gains (LTCG), taxed at 12.5 percent on the amount above Rs 1.25 lakh in a financial year.
There is no tax while you stay invested. Tax applies only when you redeem or switch. A Systematic Investment Plan (SIP) is treated as a series of separate purchases, so each instalment has its own 12 month holding clock.
Tax rules can change in a Union Budget. Confirm the current rates before you transact, or let NovaAI factor your slab and holding period into the after tax picture.
Explore Mutual Fund Categories
Compare where each category sits on risk and return
Mutual Funds
Start here to compare every equity and debt category in one place and find where to begin.
Large Cap
India's top 100 companies. The lowest volatility equity category and a steady portfolio core.
Mid Cap
Companies ranked 101 to 250. Higher growth than large caps with meaningfully bigger swings.
Small Cap
Companies ranked 251 and beyond. The highest growth potential and the sharpest drawdowns.
Flexi Cap
One fund that moves freely across large, mid, and small caps as the manager sees opportunity.
Multi Cap
Holds at least 25 percent each in large, mid, and small caps, so it always includes small caps.
Related Calculators & Research
Model returns, check overlap, and plan your investments before you commit
Portfolio Overlap Calculator
Check whether a large and mid cap fund overlaps with your existing large or mid cap holdings.
SIP Calculator
Project how a monthly investment in this category could grow over your horizon.
Lumpsum Calculator
Estimate the future value of a one-time large and mid cap investment.
CAGR Calculator
Compute the annualised return of a fund over any period.
Fund Category Explorer
Browse and compare large and mid cap funds side by side.
Asset Performance Dashboard
Compare 10 years of Nifty, Gold, and Nasdaq returns and see why no single asset wins every year.
See Where Large & Mid Cap Funds Fit in Your Portfolio
Novelty Wealth goes beyond explaining large and mid-cap funds—it helps you determine their exact place in your portfolio. Connect your portfolio, and NovaAI will evaluate your market-cap mix, flag fund overlap, and confirm whether this category adds genuine value.
Large & Mid Cap Funds: Frequently Asked Questions
A large and mid cap fund is an equity mutual fund that must hold at least 35 percent in large cap stocks and at least 35 percent in mid cap stocks at all times. It blends the stability of large caps with the growth potential of mid caps.
A large and mid cap fund is fixed to large and mid caps, with 35 percent floors in each and little or no small cap exposure. A flexi cap fund can go anywhere with no floors. A multi cap fund must hold 25 percent each in large, mid, and small caps, so it always includes small caps. Large and mid cap sits between them, without a forced small cap holding.
Yes. The mandatory 35 percent mid cap allocation adds volatility, so they fall harder than large cap funds in a correction. They are usually steadier than pure mid cap funds, because the large cap portion cushions the fall.
There is no single best fund for everyone. These funds are actively managed, so compare long-term consistency, the expense ratio, and overlap with your existing holdings. Compare options in the Fund Category Explorer, or speak to a Novelty Wealth adviser.
They suit investors who want mid cap growth without the full volatility of a pure mid cap fund, and who have a horizon of at least five to seven years. Confirm the allocation fits your overall plan.
As equity funds. Gains on units held under 12 months are taxed at 20 percent (STCG). Gains held over 12 months are taxed at 12.5 percent above Rs 1.25 lakh a year (LTCG). Verify current rates before transacting.