The asset size of HDFC Top 200 has ballooned. Does the performance of a fund get affected when the fund gets this huge?
Your concern is valid about the size of a fund. There are some funds which will be in pain if they become too big. Suppose a mid-cap fund balloons to Rs 6,000 crore. Then it will be difficult for it to handle itself.
But HDFC Top 200 invests in big companies in terms of capitalization. Just for the sake of comparison, consider JP Morgan and HSBC. They have funds which are about Rs 25,000 crore in size and their performance has not been affected. So, the size of the fund should not matter here either.
For some funds it is beneficial to be huge like debt funds, even large-cap equity funds benefit from this. But if a mid- and small-cap fund grows to this size, then it would be a matter of big concern.
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