Choosing the wrong fund category is one of the most common SIP mistakes. Here's a definitive guide to all three categories.
SEBI defines market caps clearly: Large Cap = Top 100 companies by market cap. Mid Cap = 101st to 250th companies. Small Cap = 251st company onwards.
Invest in blue-chip companies: TCS, Reliance, HDFC Bank, Infosys, etc. These companies are profitable, stable, and have been around for decades.
Best for: Conservative investors, first-time investors, goals within 5-7 years, investors who cannot tolerate 30-40% temporary drawdowns.
Mid caps are companies like Voltas, Delhivery, Godrej Properties — growing businesses with potential to become large caps. Higher growth potential, higher volatility.
Best for: Moderate-aggressive investors, 7-15 year goals, investors who have already set up large cap SIP and want higher growth component.
Small cap companies can be multi-baggers — or completely fail. High probability of both stellar returns (20%+) and significant drawdowns (50-60% drops in bear markets).
Best for: Young investors (under 35), 10+ year goals, investors with stable primary income who won't panic-sell during crashes.
| Age | Large Cap | Mid Cap | Small Cap |
|---|---|---|---|
| 25-30 years | 30% | 40% | 30% |
| 31-40 years | 40% | 40% | 20% |
| 41-50 years | 60% | 30% | 10% |
| 51+ years | 70% | 20% | 10% |
Use our free calculators to see exactly how your money grows.
Disclaimer: This article is for educational purposes only. Not investment advice. Contact: myself@sipcalculators.in