Best Performing Large and Midcap Mutual Funds for Investing in 2025
Nifty Large Midcap 250 Index is up by 17.7% in the year so far. That is a lot ahead of the Nifty 50, Nifty 100, and Nifty 500. It has made Large and Midcap Funds one of the top-performing mutual fund categories of 2024.
Several schemes have returned impressive absolute returns of above 20% as of November 28, 2024, with the category average return at 24.3%.
The investors have been able to get the dual benefit of stability from large-cap stocks and the growth potential of mid-cap stocks. This balance has made Large and Midcap Funds an attractive option for those seeking diversification and steady returns.
Large and Midcap Funds invest at least 35% of their corpus in large-cap equities that refer to the top 100 companies by market capitalization and an equal amount in mid-cap equities ranked between 101 and 250. Large and Midcap Funds invest at least 70% of their money in the top 250 companies by market size. The rest can be invested in small-cap stocks, REITs, InvITs, or fixed-income options like bonds.
Why Large and Midcap Funds in 2025?
Indian stock markets remained buoyant in 2024, thanks to domestic investors, even as foreign investors sold shares. Mid-cap and small-cap stocks performed very well, while large-cap stocks also added to the market’s growth.
Experts think that mid and small-cap stocks might not grow much in 2025 because their prices are already very high. Long term, the market still has a lot of growth. Large and Midcap Funds are a good choice as they balance growth and stability. Large-cap stocks make your investments more stable, and mid-cap stocks give better growth opportunities. These funds help in managing risks and returns and make it easier for investors to handle market ups and downs.
Hence, large-cap holding can give stability to portfolios during corrections in market periods, while mid-cap has the chance of maximum leverage during uptrends in the market.
Top Large and Midcap Mutual Funds for 2025
1. Quant Large and Mid Cap Fund
This fund, launched in December 2006, uses a quant approach to investments with a proprietary framework that searches for high-growth momentum stocks. It returns a CAGR of 29.5% over the three years, leaving the Nifty LargeMidcap 250 TRI Index, which has jumped 21.6%.
The fund’s portfolio offers a mix of large and mid-cap stocks, with some interesting allocations in Reliance Industries, ITC, and Aurobindo Pharma. It actively manages the fund, and it has an immense turnover rate; hence, there may be some short-term underperformance, but the fund overall performs optimally.
2. Motilal Oswal Large and Midcap Fund
Launched in October 2019, this fund takes a bottom-up approach to stock-picking and focuses on scalable business models in high-quality businesses. During the last three years, it has provided a CAGR of 27.1% and has outperformed its benchmark.
A fund is diversified with holdings, for example, Trent and Suzlon Energy, besides an engineering and retail focus that has been doing rather well for the past few years with considerable growth prospects.
3. ICICI Prudential Large and Mid Cap Fund
The fund that was introduced in 1998 has been restructured in 2018, focusing on large and mid-cap stocks. This fund has provided consistent outperformance with a three-year CAGR of 26.4%.
It has balanced large-cap stalwarts like Maruti Suzuki and HDFC Bank with mid-cap names like Alkem Laboratories. An advantage the fund offers is having a diversified portfolio of quality stocks with minimal portfolio churn for superior risk-adjusted returns.
Taxation for Large and Midcap Mutual Funds
The current budget has revised the tax rates on equity mutual funds. The STCG tax is now 20% if units are sold within 12 months, and the LTCG tax has been revised to 12.5% for the amount exceeding Rs.1.25 lakh per financial year.
Who Should Invest?
Large and Midcap funds are best suited for individuals who want to balance between stability and growth in a portfolio. These funds have been recommended for those with more risk appetite and an investment tenure of at least five years.
Large and Midcap Funds would offer strategic stability and growth, hence forming a great addition to the equity mutual fund portfolio. However, performance would be different for each based on fund strategies and market conditions. Investors are advised to pick up funds with a consistent track record and invest through SIPs to reduce market volatility.
