Large and mid caps form an integral part of any equity portfolio. While large caps provide stability, mid-caps boost returns. Now, if you want to gain definite exposure to large and midcap stocks through index funds until recently, this wasn’t simple. You had to invest in a large-cap index fund and in a mid-cap index fund and then rebalance your portfolio from time to time to restore that proportion. Rebalancing would have likely resulted in a tax incident as well.
But, that problem has been resolved with the introduction of the Nifty Large Midcap 250 index. This index helps you gain exposure to both large and midcap stocks through a single index fund. In this article, we will look at the historical return and volatility of this index. But first, let’s look at the construct of this index.
