Large cap mutual funds have remained under pressure compared to mid cap and small cap funds across multiple time horizons. While mid and small cap categories have generated significantly stronger returns during the broader market rally, large cap funds have struggled to keep pace, particularly in shorter timeframes where returns have remained muted or even negative. However, this recent underperformance by large caps has made investors think about where they should invest for stability.
According to market experts, the recent valuations have made the large cap funds relatively attractive and one must gradually increase the allocation in large cap funds as they provide better stability and reduce the overall volatility in the portfolio.
