Getting the large-mid cap balance right is crucial for portfolio success.
Historical Performance
Large cap 10-year CAGR: 11-13%. Mid cap 10-year CAGR: 14-18%. Mid cap premium: 3-5% annually. But mid cap max drawdown is 40-55% vs 25-35% for large cap. See our [Large Cap vs Mid Cap comparison](/compare/large-cap-vs-mid-cap).
Age-Based Allocation
Age 25-35: 50% large + 35% mid + 15% small. Age 35-50: 60% large + 30% mid + 10% small. Age 50-60: 70% large + 20% mid + 10% debt. Age 60+: 40% large + 10% mid + 50% debt.
The Large & Mid Cap Category
SEBI's large & mid cap category: Minimum 35% each. It's an excellent single-fund solution for investors who don't want to manage separate allocations. Returns: 13-16% over 10 years.
Rebalancing
Rebalance annually. If mid cap grows to 45% of equity (target: 30%), sell mid cap and buy large cap. This forces you to sell high and buy low — the opposite of emotional investing.
Fund Selection
Large cap: Prefer Nifty 50 index fund (lowest cost). Mid cap: Active funds still outperform mid cap index (unlike large cap). Consider Nifty Midcap 150 index if you want passive. Use our [Mutual Fund Calculator](/calculators/mutual-fund-calculator).