Both large- and small-cap mutual funds give high returns
Whether you look at a stock basket or a mutual fund basket, the basic tenet of investing allocationremains unchanged. Don't allocate to only one segment, even if you have the horizon
As an investor, you always had the choice between the relative stability and long-term growth of large-cap funds, and the potentially higher returns accompanied by higher volatility of small-cap funds. Let’s take an objective view of this comparison. This comparison has become more topical now, after fund categorisation norms of the Securities and Exchange Board of India (Sebi). After implementation of the new norms, a large-cap fund can buy only large-cap stocks, defined as the top 100 by market capitalisation. Earlier, as long as the scheme information document (SID) permitted, the fund could buy mid- or small-cap stocks as well. Similarly, small-cap funds will buy only small-cap stocks, defined as 251st and below as per market capitalisation.