3 Best Large & Midcap Funds for 2025 – Top Performing Large & Midcap Mutual Funds in India

As mid caps outperformed and large caps too generated decent gains, investors in large & Midcap Funds have benefitted immensely. For investors seeking the stability of large caps while benefitting from the high growth potential of mid caps, Large & Mid Cap Funds present a worthwhile opportunity.

In this article, we will explore the best Large & Midcap Funds for 2025 selected based on 3-year rolling returns. But first, let us know about the category in detail.

What are Large & Midcap Funds?

Large & Midcap Funds are equity mutual funds that invest a minimum of 35% of their assets each in large caps (top 100 companies by market capitalisation) and mid caps (companies ranking 101st to 250th on market capitalisation). In other words, these funds invest at least 70% of their assets in stocks of top 250 companies based on market capitalisation. These funds may also invest a portion of their assets in small caps, REITs & InvITs, cash, and debt, among others.

Should investors consider investing in Large & Mid Cap Funds in 2025?

The Indian equity market displayed strength and resilience in 2024 despite intense selling by FIIs as domestic investors fuelled growth. The growth was notable in the mid and small-cap stocks, which outperformed and gained significantly. Large-cap indices too made substantial progress, contributing to the overall market rally.

Going ahead, market experts are of the opinion that investors should keep their expectations lower from mid and small-cap stocks in 2025 due to expensive valuations. They believe that the positives are already priced in, and a large number of stocks are trading above their intrinsic value.

Having said that, India's long-term growth story is intact and hence, long-term opportunities still exist across the Indian equity market. So, while it is essential to exercise caution near market highs, it is prudent to maintain a balanced exposure across various market capitalisations to accomplish various financial goals. Large & Midcap Funds represent a distinct multi-cap investment strategy that allows investors to diversify their holdings among both large and mid-sized companies.

If the market corrects, the large-cap allocation can offer stability to the portfolio by limiting the downside risk. On the contrary, if the market keeps soaring despite the rising valuations, the mid-cap exposure can continue to reward investors with substantial gains.

Who should consider investing in Large & Mid Cap Mutual Funds?

Investors who are seeking the stability of large caps but do not want to miss out on the high-growth potential of mid caps, can consider adding Large & Mid Cap Funds to the 'Core' part of their equity mutual fund portfolio. One should have a high risk appetite to bear the impact of short-term volatility, and a long-term investment horizon of at least 5 years.

How are Large & Midcap Mutual Funds taxed?

As per the proposals made in the Union Budget for 2024-25, capital gains tax on equity mutual funds has been revised. The holding period for Large & Midcap Mutual Funds from a tax perspective will continue to be 12 months. If you sell your Large & Midcap Mutual Funds units before 12 months, the gains will be subject to short-term capital gains (STCG) tax of 20% compared to 15% earlier.

On the other hand, if you sell your Large & Midcap Mutual Funds units after completing one year, the gains will be subject to long-term capital gains (LTCG) tax of 12.5% compared to 10% earlier, but only if the gains exceed Rs 1.25 Lakh in a financial year.

Which are the best Large & Midcap Funds for 2025?

Best Large & Midcap Fund for 2025 #1: Quant Large & Mid Cap Fund

Launched in December 2006, Quant Large & Mid Cap Fund is an agile scheme in the Large & Mid Cap Fund category that adopts a quantitative approach to select high-growth, momentum-driven stocks across sectors. This quantitative approach is based on the fund house's proprietary VLRT framework, which evaluates the stocks on their Valuations, Liquidity, Risk, and Timing.

The fund has registered extraordinary performance from 2020 onwards, thereby rewarding its investors with remarkable gains. The active investment approach and the ability to timely identify multi-bagger ideas have helped it generate a remarkable lead over the benchmark and its prominent peers.

In the last 3 years, Quant Large & Midcap Fund has recorded growth at a CAGR of 29.5% on a rolling return basis, higher than the growth of 21.6% in the benchmark Nifty LargeMidcap 250 - TRI index.

Quant Large & Midcap Fund's top stock holding comprises a mix of large-cap and mid-cap stocks such as Reliance Industries, ITC, Aurobindo Pharma, L&T, and Samvardhana Motherson International. Sectorwise, the fund currently has higher exposure in Consumption and Finance, followed by Infrastructure, Petroleum, and Healthcare, among others.

Quant Large & Mid Cap Fund holds many of its stocks with a short-term view, and as a result, it has usually recorded a high turnover of 300-400% in the last one year. Despite witnessing bouts of underperformance in the short to medium term, the fund has created a satisfactory long-term track record.

Best Large & Midcap Fund for 2025 #2: Motilal Oswal Large & Midcap Fund

Launched about five years back in October 2019, Motilal Oswal Large & Midcap Fund utilises the bottom-up stock picking approach to identify and invest in high quality businesses having sustainable and scalable business models.

Though the fund underperformed during the 2020 market crash, it has established itself as a strong player in the current market rally. This helped the fund to outpace many of its peers and strengthen its overall track. The fund invests a minimum of 35% of its assets each in mid and large-cap stocks, and the balance in small-cap stocks, which helped it to benefit from the broad-based market rally in recent years.

In the last 3 years, Motilal Oswal Large & Midcap Fund has recorded growth at a CAGR of 27.1% on a rolling return basis, higher than the growth of 21.6% in the benchmark Nifty LargeMidcap 250 - TRI index.

Motilal Oswal Large & Midcap Fund's top holdings are spread across market caps and include higher exposure in Trent, Zomato, Kalyan Jewellers India, Samvardhana Motherson International, and Suzlon Energy. Its portfolio is skewed towards Engineering stocks, followed by Retail, Finance, Auto & Ancillaries, and Realty.

Within its relatively short track record, Motilal Oswal Large & Midcap Fund has established itself as a high-performing fund in the Large & Midcap category, delivering commendable returns in recent years. The fund's strategic focus on high-growth large and mid-cap stocks with an eye on valuations has been instrumental in its recent success.

Best Large & Midcap Fund for 2025 #3: ICICI Pru Large & Mid Cap Fund

Launched in July 1998, ICICI Pru Large & Mid Cap Fund was originally known as ICICI Pru Large Cap Fund before being recategorised and renamed in 2018. Accordingly, the past performance of the fund (until 2018) is not directly comparable. However, under its current mandate, the fund has performed well in recent years.

Its well-balanced exposure across market leaders and emerging leaders, coupled with a focus on fundamentally sound value-oriented stocks across high-potential sectors has resulted in superior risk-adjusted returns for its investors. The fund showed a turnaround in performance from 2021 onwards, outpacing the benchmark by a strong margin and topping the category returns.

On a rolling return basis in the last 3 years, ICICI Pru Large & Mid Cap Fund has recorded growth at a CAGR of 26.4%, higher than the growth of 21.6% in the benchmark Nifty LargeMidcap 250 - TRI index.

Its top holdings comprise mainly large-cap names such as Maruti Suzuki India, Bajaj Finserv, ICICI Bank, and HDFC Bank, followed by some mid-cap names such as Alkem Laboratories, SBI Cards and Payment Services, and FSN E-Commerce Ventures. Its portfolio has a notable inclination towards Banking & Finance and Auto & Auto Ancillaries along with Healthcare, Petroleum, and Infotech among others.

ICICI Pru Large & Mid Cap Fund avoids frequent churning in its portfolio and holds most of the stocks in the portfolio until their full potential is realised. Backed by a process-driven fund house and focused on maintaining a diversified portfolio of quality stocks/sectors at the right valuation, the fund possesses the ability to reward investors over the long run.

Conclusion

Investing in Large & Midcap Funds can be an excellent strategy for giving a boost to your mutual fund returns as the balance of large caps and mid caps in these funds help balance risk and return. However, it is important to note that the performance of schemes within the category can vary significantly based on the fund manager's investment strategy, asset allocation, and market conditions. Therefore, instead of relying on recent performance, one must select schemes that have consistently performed well across diverse market conditions. Besides, one must ideally prefer the SIP mode to invest in the category to minimise the impact of market volatility over a period.

Note: This write up is for information purpose and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Registration granted by SEBI, Membership of BASL and certification from NISM no way guarantee performance of the intermediary or provide any assurance of returns to investors.

The securities quoted are for illustration only and are not recommendatory.

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DIVYA GROVER is the co-editor for FundSelect, the flagship research service of PersonalFN. She is also the co-editor of DebtSelect. Divya is an avid reader which helps her in analysing industry trends and producing insightful articles for PersonalFN’s popular newsletter – Daily Wealth letter, read by over 1.5 lakh subscribers.
Divya joined PersonalFN in 2019 and has since then used stringent quantitative and qualitative parameters to analyse funds to provide honest and unbiased research to investors. She endeavours to enable investors to make an informed investment decision and thereby safeguard their wealth.

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.
This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes.