Sundaram Large and Midcap Fund for Long-Term Growth

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That’s where Sundaram large and midcap fund comes into play.

Investing in equity mutual funds, you may sometimes find that you have to choose the large-cap funds or mid-cap funds; which is more stable or more growth oriented?

This large and midcap funds guide will help you know about the objective, strategy, features, potential benefits, risks, investment process, and some factors to consider before investing in the Sundaram large and midcap fund regular plan growth.

What Is Sundaram Large and Midcap Fund?

Sundaram large and midcap fund is an open-ended equity fund that invests in both large cap and midcap stocks.

Imagine that the fund is a two- engine vehicle.

The large-cap segment gives investors exposure to established businesses with relatively mature operations, while the mid-cap segment provides exposure to businesses with significant growth opportunities.

Key Highlights of Sundaram Large and Midcap Fund

It is beneficial to be familiar with the fundamentals of the scheme prior to investing in it.

The above features enable investors to invest in the fund with a relatively lower amount and gradually create an equity portfolio.

Understanding the Large and Mid Cap Fund Category

The initial step towards comprehending the fund knows what large-cap and mid-cap stocks are.

These two segments have to be combined as they may act differently in different market cycles.

What Are Large-Cap Companies?

Some of the largest listed companies of the Indian equity market are the large-cap companies.

That’s a role that large cap companies can fill in a diversified equity portfolio.

What Are Mid-Cap Companies?

Mid-cap companies are typically between the large-cap and small-cap companies in terms of market cap.

There are many mid-size companies that have surpassed the early stages of business growth and have still got a lot of growth potential.

Why Combine Large and Mid Caps?

The mix provides investors with exposure to two aspects of the equity market.

Either large caps or mid caps can give you exposure to established businesses, or a growth-oriented element can be added.

The Sundaram large and midcap fund takes a hybrid route as the AMC has said that it has kept the exposure level of both segments at a minimum of 35%.

Investment Objective of Sundaram Large and Midcap Fund

The Sundaram large and midcap fund investment objective is to achieve capital appreciation by investing primarily in equity and equity related instruments of large cap and mid cap stocks.

The stock market isn’t always predictable. Even a well-managed fund can perform poorly during certain market cycles and times of market downturn, as well as during times of difficulty for specific sectors and companies.

Sundaram Large and Midcap Fund Regular Plan Growth Explained

The Sundaram large and midcap fund regular plan growth option is meant for those investors who invest through Regular Plan and opt for Growth option.

It is important to know what these two are when it comes to understanding them.

What Is a Regular Plan?

The Regular Plan is normally provided via a mutual fund distributor or intermediary.

The distributor helps to make the investment process smoother, and commissions paid to the distributor are part of the plan’s costs. So the cost of a Regular Plan may be different than the cost of the Direct Plan.

What Is the Growth Option?

The Growth option does not distribute the income of the scheme periodically from the scheme, unlike IDCW which distributes just income generated from the fund.

Rather, the NAV reflects the investment’s value and fluctuates with market changes and scheme expenses.

Who Should Consider Sundaram Large and Midcap Fund?

Here are a few reasons to consider the Sundaram large and midcap fund as an investment:

• Desire to learn about both large cap and mid-cap companies.
• Be ready to hold on to your investments for an extended period of time.
• Know how to interpret the volatility in the stock market.
• Willing to take risk of capital loss to gain capital appreciation.
• Choose a wide-ranging equity portfolio.
• Interested in investing via SIP or one time investment.
• May withstand fluctuations in the market.

Risk Factors You Should Know

All investments have a risk-reward trade-off.

The Sundaram large and midcap fund invests mostly in stocks and hence the NAV of the fund may change drastically.

Market Risk

Reasons for equity markets to decline include concerns about corporate earnings or investor sentiment, interest-rate changes, geopolitical events, and economic slowdowns.

Mid-Cap Volatility

Mid-cap stocks can have more volatile price swings as compared to some of the more established large-cap stocks.

That can bring about short-term volatility.

Valuation Risk

No matter how good your business is, it can get costly.

When a stock is priced at a valuation which they deem high at the time of purchase, but ends up being higher than they want later, the stock price can fall even if the company is profitable.

Concentration Risk

The portfolio is well-diversified, but a meaningful allocation of funds may be made in one or more of the sectors or themes.

The returns may be influenced by the developments in the particular sector.

No Guaranteed Returns

The aim of the fund is capital gain and not definite returns.

All historical results are not necessarily indicative of future results.

Regular Plan vs Direct Plan

It’s common for investors to compare Regular and Direct Plans prior to investing.

While the fundamental scheme and investment objective is the same there are some differences in the distribution structure. Regular Plan means a plan of distribution which requires the distributor or intermediary; Direct Plan means a plan of distribution which does not require the distributor or intermediary.

Those investors looking to invest in the Sundaram large and midcap fund regular plan growth should think about the extra expenses involved in the Regular Plan and the benefit it offers distributors to them.

The selection will depend on the level of knowledge, investment objectives and the professional help needed in distributing the product.

Conclusion

The Sundaram large and midcap fund provides investors a diversified approach to invest in both the large and midcap companies with a single equity mutual fund.

If you are specifically interested in investing in the Sundaram large and midcap fund regular plan option, you must know about the Regular Plan structure, Growth option, Investment strategy, cost and risks before investing.

FAQs

1. What is Sundaram Large and Midcap Fund?

Ans) Sundaram Large and Mid Cap Fund is an open-ended equity fund, which has a primary focus on large-cap and mid-cap stocks.

2. What is Sundaram Large and Midcap Fund Regular Plan Growth?

Ans)It’s the Regular Plan (Growth) in which the investors invest in a distributor and their money is left in the scheme.

3. Is Sundaram Large and Midcap Fund suitable for long-term investment?

Ans)The fund is geared towards investors who want to invest for the long-term, in large cap and mid cap stocks.

4. Can I invest through SIP in Sundaram Large and Midcap Fund?

Ans)Yes. Sundaram Mutual offers SIPs in the scheme, with the necessary minimum investment criteria.

5. What is the exit load on Sundaram Large and Midcap Fund?

Ans)A 1% exit load will be applicable in case of specified redemptions of more than 25% of the units within a year, where after 365 days; there will be no exit load applicable.