Large & mid-cap mutual funds vs separate portfolio split: How do their returns compare over 1, 3 and 5 years? — SkimNews
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- SEBI categorisation rules require large & mid-cap funds to invest at least 35% each in large-cap and mid-cap stocks, while large-cap funds must hold 80% in large-caps and mid-cap funds at least 65% in mid-caps.
- Large & mid-cap funds attracted ₹3,872.79 crore in August inflows per AMFI, while large-cap funds saw ₹1,147.36 crore in outflows and mid-cap funds pulled in ₹6,989.40 crore.
- Large & mid-cap funds outperformed the BSE Large MidCap TRI benchmark, returning 2.55% vs -1.54% over one year, 12.25% vs 9.16% over three years, and 12.41% vs 9.39% over five years (Value Research, Direct Plans, CAGR as of 11 September 2026).
- Large & mid-cap funds beat their benchmark by 3.09 percentage points over one and three years and 3.02 points over five years — a wider margin than mid-cap funds' outperformance of 2.15, 1.18, and 0.31 percentage points respectively.
- Mid-cap funds delivered the highest absolute returns across all three periods: 7.48% (1 year), 15.48% (3 years), and 16% (5 years).
- Motilal Oswal Midcap Fund led its category with a 22% five-year return, ahead of Motilal Oswal Large and Midcap Fund at 19.23% and Nippon India Large Cap Fund at 13.19% (data as of 31 August 2026).
Why it matters: Investors weighing a single large & mid-cap scheme against separate allocations now have direct evidence: mid-cap funds posted the highest absolute returns (16% over five years), but the combined large & mid-cap category delivered the widest outperformance over its benchmark (3+ percentage points consistently), giving investors who want benchmark-beating alpha without picking individual funds a built-in structural advantage.
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