Large Cap - Mid Cap - Small Cap



Below is the chart that shows how ₹1000 in each of these funds grew over a period of 20 years from 2003 to 2023.




From the chart it was noticed that Small cap and Mid cap returns are more than Large cap.

During corrections, large cap will correct upto 20%. Midcaps can fall from 30–40% and Small cap may lose the value from 40–60%.

If we invest only in Small Caps by looking at past performance, we may get panic and try to withdraw the entire portfolio during corrections.

Investment in large cap alone will not give desired returns. It is also advised to invest some portion in Debt funds also. This will help in generating emergency fund so that we can withdraw if required with out disturbing the equity part.

So invest 40% in Large cap, 30% in Midcaps, 20% in small cap and 10% in debt funds for better returns.




 

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