1. Proper selection of balance 20% of equity stocks will largely decide alpha generation by large-cap funds now, due to heavy overlap of the 100 large-cap stocks among their portfolios.
2. For long-term exposure to large-cap stocks, with stable risk-adjusted returns, Index funds in this category could now be a better investment if actively-managed large-cap funds are unable to justify their higher expense ratio through a higher alpha generation.
3. More aggressive investors, in any case, would switch to good large & mid-cap funds, or even to a multi-cap fund, for long-term investment.
4. As per Sebi's mandate, a large & mid-cap fund can invest 30% max. in small-cap stocks too - as only 35% min. is prescribed for large and mid-cap stocks each - which means it can traverse the entire equity and debt universe too !
5. Large-cap funds will have 80% min. large-cap stocks, hence 20% max. can be all others like mid-cap, small-cap and debt products too, depending on the investment style decided by the AMCs.
2. For long-term exposure to large-cap stocks, with stable risk-adjusted returns, Index funds in this category could now be a better investment if actively-managed large-cap funds are unable to justify their higher expense ratio through a higher alpha generation.
3. More aggressive investors, in any case, would switch to good large & mid-cap funds, or even to a multi-cap fund, for long-term investment.
4. As per Sebi's mandate, a large & mid-cap fund can invest 30% max. in small-cap stocks too - as only 35% min. is prescribed for large and mid-cap stocks each - which means it can traverse the entire equity and debt universe too !
5. Large-cap funds will have 80% min. large-cap stocks, hence 20% max. can be all others like mid-cap, small-cap and debt products too, depending on the investment style decided by the AMCs.