Here’s the list of the best large and mid cap mutual funds to invest in 2019 –
- Mirae Asset Emerging Bluechip Fund
- Principal Emerging Bluechip Fund
- Canara Rob Emerging Equities Fund
Here are the parameter scores of the above funds according to Finpeg CRAFT Framework…
To understand the parameters in detail, please refer to Finpeg CRAFT Framework
You can refer to the following pointers to understand what each of these parameters mean in short…
- Long-term Percentile Rank
This is average percentile rank of the fund since Jan 2004 based on 3-year return. This is a measure of a fund’s performance with respect to its peers. Lower the rank, better the performance.
- Top25 Percentage
This is the percentage to capture the number of times the fund was in 25% since Jan 2004. This is a measure of consistency of performance of a fund. The higher the percentage, better the consistency.
- Downside Deviation
A variant of standard deviation. It only captures deviation below the average return. This captures the risk associated with the fund. Lower the deviation, lower is the risk.
- Near-term Percentile Rank
Average percentile rank of the fund in last 1 year based on 1-year return. This is a measure of a fund’s recent performance with respect to its peers. Lower the rank, better the performance.
- Average Return in 2008-09
Average 1-year return delivered by the fund during the crash of 2008-09. This captures the performance of the fund during times of stress.
Why Mirae Asset Emerging Bluechip Fund is the best large and mid cap mutual fund to invest in 2019
Mirae Asset Emerging Bluechip Fund is hands down the best equity mutual fund of the last 8 years or so. No matter what category.
Just have a look at the performance indicators. It has been a Top25 percentage fund throughout its life. The long-term percentile (lower the better) is in single digit. When you have such great performances on the return front, frankly, other factors start to matter. The only deterrent would have been if the fund manager had changed recently. But Neelesh Surana is still at the helm and doing a great job at Mirae Asset.
This makes it the best large and mid cap fund by a great margin. Before starting to belong to this newly created category, Mirae Asset Emerging Bluechip Fund was primarily a mid cap fund.
Now, the problem is that since it is a new category, it becomes very difficult to rate the funds basis their previous performance. They were being operated under a different mandate before the recategorization was enforced. But today, the rules have completely changed. It remains to be seen under the new rules if the funds are going to live up to their past performance.
Everything said, Mirae Asset Emerging Bluechip Fund is an absolute rock star. If you are thinking of investing in it, you can trust it even with the change in how it functions now.
What are Large and Mid Cap Mutual Funds
As per the latest definition, large cap companies are the 100 largest publicly listed companies in the country. Similarly, the next 150, meaning the companies ranked from 101 to 250, in terms of full market capitalization are termed as mid cap companies. The all the other companies, ranked from 251 onward, are termed as small cap companies.
So the mutual funds which primarily invest the money they receive from investors in large cap and mid cap companies are termed as large and mid cap mutual funds.
SEBI, after the latest recategorization, has mandated large and mid cap mutual funds invest at least 35% of the money they receive each in large cap and mid cap companies. So the minimum and maximum allocation toward large cap or mid cap companies is 35% and 65% respectively. This provides decent flexibility to these funds given that they can invest up to 40% of the money they receive in small cap funds too.
This is a new fund category and not a lot of people know how to view it or use funds belonging to this new category in their portfolios. Most people, including me, view it as a restricted multicap mutual fund.
This category is like a puzzle piece which will take some time to find its place.
Who should invest in Large and Mid Cap Mutual Funds
As mentioned, it remains to be seen where this fund will find its place in a typical equity mutual fund portfolio.
But this is a good fund category to get a taste of mid cap companies. While a multi cap fund could go overboard with mid cap and small cap allocation in bullish market conditions, a large and mid cap fund will continue to invest in a mix of large, mid and small cap companies.
Additionally, the mix of all companies based on market capitalization will be healthy most of the times for large and mid cap mutual funds.
The biggest reason to invest in a large and mid cap fund is Mirae Asset Emerging Bluechip Fund. It just cannot be praised enough for its past performance!
What are the expected returns of Large and Mid Cap Mutual Funds
The funds that are large and mid cap funds today did not always belong to this category. They were multicap funds, mid cap fund etc before the categorization came into force.
This exercise should be viewed as an attempt of helping you with the past performance of the best large and mid cap fund in absolute terms and nothing else.
For the best multi cap mutual funds according to Finpeg, the following are the 3-year and 5-year rolling return and standard deviation.
Note – NAV considered is of regular and growth options of the funds and for the period 1st Jan 2010 to 31st Dec 2018
The returns are pretty high because until the recategorization was enforced these funds had a high exposure to mid cap companies. But now they will have a substantial exposure to large cap companies too. This will considerably change the risk-return profile of these funds.
So, it would be foolhardy to assume that these funds will continue to yield returns as high as 25% most of the times. The expected returns from now on could be assumed to along the returns of the best multi cap mutual funds.
To know what are the best mutual funds in other categories like small cap, visit this page.