Large and mid cap mutual funds invest at least 35% of their assets in large cap stocks and another 35% in mid cap stocks, as mandated by the Securities and Exchange Board of India. That leaves the remaining 30% for the fund manager to allocate based on market views. This structure creates a category that sits between pure large cap and pure mid cap schemes in terms of risk and return.
The mandatory mid cap exposure makes these funds riskier than large cap funds, but less risky than pure mid cap schemes which typically invest about 65% in mid caps. The large cap portion provides some stability. Fund managers can tilt the extra 30% toward large caps when they see value there, or toward mid and small caps when those segments look promising. That flexibility means risk levels can shift over time.
Where large and mid cap funds fit in a portfolio
Before SEBI introduced mutual fund categorization, most equity funds freely blended large and mid cap stocks.
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The category will evolve over time as some funds develop a bias toward large caps and others lean toward mid caps. That will make it easier for investors to choose based on their own risk tolerance. Someone wanting more margin of safety might pick a fund that tilts toward large caps, while a more aggressive investor could bet on one with a mid cap lean.
The remaining 30% of the corpus is where the real decision happens. If the fund manager thinks the large cap space is attractive, that portion goes into large caps. If mid caps and small caps look ready to run, the money moves there. This means the risk profile of any given scheme can change substantially depending on market conditions and the manager’s outlook.
Top picks for July 2026
The report recommends six large and mid cap schemes for investors willing to take extra risk: Axis Large & Mid Cap Fund, Mirae Asset Large & Midcap Fund (with a SIP cap of Rs 25,000), Canara Robeco Large & Mid Cap Fund, Sundaram Large & Midcap Fund, Kotak Large & Midcap Fund, and Quant Large & Mid Cap Fund.
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Performance metrics for some of these funds have shifted recently. Axis Large & Mid Cap Fund dropped from the second quartile to the third quartile in the last month. Canara Robeco Large & Mid Cap Fund fell from the third quartile to the fourth quartile over the past six months. Sundaram Large & Mid Cap Fund improved from the fourth quartile to the third quartile in the last eight months. Mirae Asset Large & Midcap Fund moved from the fourth quartile to the third quartile over the last 10 months.
We will closely follow the performance of the recommended schemes and update you every month.
Also Read | Looking for long-term wealth creators? These 12 equity mutual funds have over Rs 1,000+ NAV and up to 24% CAGR Best large & mid cap mutual funds to invest in July 2026:
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
