PGIM India Mutual Fund on January 24, 2024 launched the PGIM India Large and Mid-Cap Fund, an equity scheme investing in both large-cap and mid-cap stocks. This scheme is benchmarked against the NIFTY LargeMidcap 250 Index TRI.
The new fund offer (NFO) opened for subscription on January 24 and will close on February 7, 2024. Investors can buy units with a minimum application amount of Rs 5,000 and in multiples of Re 1 thereafter. For systematic investment plans (SIP), the minimum application amount is Rs 1,000, with minimum five instalments.
For exits within 90 days from the date of allotment, there is an exit load of 0.50 per cent.
Understanding Large And Mid-Cap Funds
Large and mid-cap funds is a category of mutual funds that seeks to blend the stability of large-cap stocks with the growth potential of mid-cap stocks. Under the Securities and Exchange Board of India (Sebi) guidelines, these funds are mandated to invest a minimum of 35 per cent each in large-cap and mid-cap stocks. Large-cap companies, the top 100 by market capitalisation, are known for their strong track records, brand names, and lower volatility.
Mid-cap stocks, ranked between 101st and 250th in stock market capitalisation, are not as stable as large-caps, but provide higher growth potential without the high volatility associated with small-cap stocks. Thus, the category is a blend of both types of stocks.
Portfolio Allocation
The scheme will allocate 70-100 per cent of funds in equity and equity-related securities of large-cap and mid-cap companies, and up to 20 per cent in debt and money market securities, up to 10 per cent in units issued by real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), and up to 25 per cent in foreign securities, including overseas exchange traded funds (ETFs).
Currently, the large- and mid-cap fund category boasts around 26 schemes, with around 20 having a performance record of seven years. The average 3-year return for the large- and mid-cap fund category stands at 21.91 per cent, while the 5-year return is 19.42 per cent.
