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Summary: We sifted through all 33 actively managed funds in this category to find the ones with a perfect five-star rating from Value Research. But we didn’t stop there. We dug deeper to see whether these funds have actually walked the talk over the long term. From their 10-year track records to five-year rolling returns (a far better test of consistency than just point-to-point numbers), we reveal how often these funds beat their benchmark, how frequently they delivered double-digit returns and how many times they produced blockbuster 25 per cent-plus annualised gains.
When it comes to mutual funds, investors are usually familiar with large-cap funds (that invest in market heavyweights) and mid-cap funds (that chase faster-growing mid-sized companies). But there’s a third category that combines the best of both worlds: large & mid-cap funds.
These funds must invest at least 35 per cent each in large-cap (top 100 companies by market capitalisation) and mid-cap stocks (companies ranked 101 to 250 by market capitalisation), which gives them a nice balance of stability and growth potential.
And you may be surprised to know this is not a small fund category. There are 33 actively managed large & mid-cap funds in the market right now, with 10 large &mid-cap funds having net assets worth Rs 10,000 crore and more. The biggest of them all is Mirae Asset Large & Midcap Fund, which manages roughly Rs 40,000 crore.
Clearly, investors see this as a sweet spot between the safety of large caps and the excitement of mid caps.
How Value Research Rating works
Before we talk about which large & mid-cap funds have earned five stars, let’s understand what Value Research star ratings really mean.
Our star rating system looks purely at risk-adjusted past performance. It compares a fund with its peers in the same category, looking at both returns and volatility. Funds that have delivered higher returns without taking undue risk are ranked higher.
But – and this is important – star ratings are only a starting point. They are not recommendations. A five-star rating simply means the fund has done very well historically on a risk-adjusted basis. But investors should always consider their own risk appetite, goals and time horizon before choosing a fund.
Now that we understand how the rating system works, let’s look at the three funds that have a flawless five-star rating, as of September 18, 2025.
The three five-star large & mid-cap funds
- Bandhan Large & Mid Cap Fund
- ICICI Prudential Large & Mid Cap Fund
- Motilal Oswal Large & Midcap Fund
Let’s see how each of them has performed.
Bandhan Large & Mid Cap Fund
This fund has been quietly consistent. Its direct plan has delivered 18 per cent annualised returns over 10 years (between September 17, 2015 and September 17, 2025), ranking third-best in the category. Over five years (between September 17, 2020 and September 17, 2025), it has delivered 26.7 per cent annualised returns, again among the top three.
But point-to-point returns can sometimes flatter a fund because of where the start and end dates fall.
That’s why we look at five-year rolling returns – where we calculate returns for every possible five-year period. For example, September 1, 2020–September 1, 2025, then September 2, 2020–September 2, 2025, and so on. This smooths out market timing effects and shows how consistently the fund performed.
Here’s what we found:
- Beating the benchmark: The fund has outperformed its benchmark, BSE Large Mid Cap TRI, more than 60 per cent of the time over any five-year period between September 2020 and September 2025. In other words, if you had invested in this fund at almost any point in this window, there’s a better-than-even chance that your returns would have been higher than simply investing in the benchmark index.
To get a clearer picture, we broke down all possible five-year returns into buckets:
- The fund never delivered negative returns over any five-year period.
- 0–10 per cent returns: Only 4.67 per cent of the time did the fund deliver such modest returns. This means “disappointing” returns were rare.
- 10–15 per cent returns: This was the most common outcome, happening 41.5 per cent of the time.
- 15–20 per cent returns: Another 28.5 per cent of the time.
- 20–25 per cent returns: This happened 4.5 per cent of the time.
- Above 25 per cent returns: Here’s the exciting bit. In more than one-fifth of the periods (20.6 per cent), the fund delivered stellar 25 per cent-plus annualised returns over five years.
In short, a very respectable track record with plenty of instances of high returns.
ICICI Prudential Large & Mid Cap Fund
If Bandhan is about quiet consistency, ICICI Prudential’s offering is about steady outperformance. Over the last five years, its direct plan has delivered 28.1 per cent annualised returns, making it the second-best performer in the category. Its 10-year annualised return of 17.7 per cent also ranks among the top five.
Again, rolling returns tell the real story:
- The fund outperformed the benchmark two-thirds of the time (about 66 per cent).
- The fund never delivered negative five-year returns.
- 0–10 per cent returns: Only 4.8 per cent of the time did investors see single-digit returns in any five-year window between September 2020 and September 2025.
- 10–15 per cent returns: The most common outcome, 44.5 per cent of the time. did investors earn steady, early double-digit compounding in this range.
- 15–20 per cent returns: 23.5 per cent of the periods fell into this range.
- 20–25 per cent returns: A strong 20.8 per cent of the time.
- Above 25 per cent returns: 19.3 per cent of all five-year periods delivered more than 25 per cent annualised returns.
Motilal Oswal Large & Mid Cap Fund
This is the newest of the three, launched in late 2019 – but it has made a big splash.
- Three-year annualised returns: 29.7 per cent (best in category)
- Five-year annualised returns: 30.6 per cent (again, best in category)
Because of its relatively short history, we can’t calculate rolling returns over long periods. But its calendar-year performance tells a compelling story:
- Outperformed its benchmark in four out of five years since launch.
- In 2024, it delivered a stunning 47 per cent return, more than three times the benchmark’s 14.5 per cent.
Interestingly, this fund has never been rated below four stars since inception, a sign of sustained quality, at least in recent years.
So, should you invest in these funds?
A five-star rating is a great indicator of past success, but it’s not a guarantee of future performance. Even a three-star fund could be a great choice for you, depending on your risk appetite and time horizon.
That’s why our ‘Best Buy’ list goes beyond just ratings. We look at consistency, portfolio quality, costs and how a fund fits into a well-diversified portfolio.
To see if these three funds make the cut for your portfolio, check out Value Research Fund Advisor, your personalised tool for building and tracking a winning mutual fund portfolio.
Also read: These 3 large & mid cap funds doubled SIP money in 6 years
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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