Heard about large-cap and mid-cap funds? But, how do they differ (large-cap vs mid-cap) from each other? This is often a confusing category for an investor when planning to invest in Equity Funds. Nevertheless, one good thing is— we are here to clear your confusion! So, let us first understand these terms individually and in a bit detail.
A large cap fund is a type of fund where investment is made in majorly with companies of large market capitalization. These are essentially large companies with large businesses. Large cap stocks are also commonly referred to as blue chip stocks. One essential fact about the large cap is that information regarding such large companies is easily available in publications (magazines/newspapers).
Mid-cap funds invest in mid-sized companies. Stocks held in mid-cap funds are the companies that are still developing. These are mid-size corporates that lie between large and small cap stocks. They rank between the two extremes on all important parameters like company size, client base, revenues, team size etc.
Large caps are shares of well-established companies that have a strong hold on the market and are usually considered as safe investments. They are companies that have a market capitalization (MC= no of shares issued by the company X market price per share) of more than INR 10,000 crore. Mid caps could be companies with a market capitalization of INR 500 Cr to INR 10,00 Cr.
From a standpoint of the investor, the Investing period of mid-cap funds should be much higher than large-caps due to the nature of the companies.
|Large cap company||1st to 100th company in terms of full market capitalization|
|Mid cap company||101st to 250th company in terms of full market capitalization|
|Small cap company||251st company onwards in terms of full market capitalization|
Large-cap funds invest in those firms that have more possibility of showing year on year steady growth and high profits, which in turn also offers stability over a time. These stocks give steady returns over a long period of time. When an investor invests in mid caps for a long term, they prefer those companies that they think will be tomorrow’s runway successes. Also, the greater the number of investors in mid-cap stocks, the more it tends to grow in size. Since the price of large caps has increased, large institutional investors like Mutual Funds and Foreign Institutional Investors (FIIS) are increasingly investing in mid-caps these days.
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Infosys, Wipro, Unilever, Reliance Industries, ITC, SBI, ICICI, L&T, Birla, etc., are a few blue chip companies in India. These are the firms that have established themselves well in the Indian market and are leading players.
Some of the most emerging, mid-cap companies in India are- Blue Star Ltd., Bata India Ltd., City Union Bank, IDFC Ltd., PC Jeweller Ltd., etc.
|Large cap funds||mid cap funds|
|Invest in stocks of well-established companies||Invests in stocks of developing companies|
|Market Capitalization- INR 1000 Cr||Market Capitalization- INR 500- 1000 Cr|
|Less Volatile||High Volatile|
|Companies eg- Wipro, Infosys. Unilever, Reliance Industries, etc.||Companies eg- Bata India, PC Jeweller, City Union Bank, Blue Star, etc.|Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2018 (%) Indiabulls Blue Chip Fund Growth ₹22.37
₹191 12.4 1.2 11.6 13.6 9.1 -1.4 Essel Large Cap Equity Fund Growth ₹23.9919
₹104 10.9 0.6 10.5 11.7 8.5 -6 BNP Paribas Large Cap Fund Growth ₹96.94
₹808 10.5 4.9 17.6 14.6 8.6 -4 Canara Robeco Bluechip Equity Fund Growth ₹26.87
₹257 12.8 4.6 15.2 15.7 8.9 3.4 Kotak Bluechip Fund Growth ₹249.945
₹1,444 12.9 3.4 14.3 12.7 8.3 -2.1 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 4 Dec 19 Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2018 (%) Motilal Oswal Midcap 30 Fund Growth ₹26.5106
₹1,625 13.8 4.8 12.2 6.7 9.2 -12.7 BNP Paribas Mid Cap Fund Growth ₹32.299
₹757 10.3 -1.8 6.3 7.6 7.6 -17.5 Edelweiss Mid Cap Fund Growth ₹26.76
₹945 10.3 -1.7 5.5 9.8 8.4 -15.7 SBI Magnum Mid Cap Fund Growth ₹71.2466
₹3,523 9.1 -3.1 1.7 2.6 6.1 -18 Aditya Birla Sun Life Midcap Fund Growth ₹272.92
₹2,356 8.4 -6.3 -2.9 4.4 6.3 -16 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 4 Dec 19
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