HDFC Large and Mid Cap Fund

HDFC Large and Mid Cap Fund has delivered strong long-term SIP XIRR of 18.43% (3Y), 19.26% (5Y), and 19.12% (7Y), consistently beating category averages of 18.19%, 18.04%, and 17.07% over the same periods. Against the NIFTY 50, the fund shows persistent positive alpha across all windows, including 6.83% over 5Y and 7.24% over 7Y, with lump-sum CAGRs of 12.0% (5Y) versus the benchmark's 5.16%. Short-term XIRR of 9.38% (1Y) lags the category average of 11.01% and the calendar 2026 return of -6.7% reflects a weak recent market.

The fund demonstrates controlled drawdown behavior with 7 major drawdown events over the period, and stable Calmar ratios of roughly 0.38 to 0.40 across 1Y to 10Y windows indicate consistent risk-adjusted returns. Against the NIFTY 50, downside capture is consistently below 100% (94.55% at 1Y, 91.63% at 5Y) while upside capture is at or near 100%, meaning the fund loses less in declines while keeping pace in rallies. Beta below 1.0 in longer windows (0.949 at 7Y) confirms moderately lower volatility than the benchmark.

The portfolio is well diversified across 232 holdings, with the top 10 positions totaling only about 21% of NAV — the largest single stock, ICICI Bank, is just 3.66%. Banks dominate at 17.0% of the portfolio plus 7.9% in Finance, giving a combined financials tilt of nearly 25%, followed by Pharmaceuticals & Biotechnology at 12.0%. Exposure spans telecom (Bharti Airtel), petroleum (Reliance), realty (Prestige), and healthcare services, adding breadth beyond traditional large-cap sectors.

The fund beats category average SIP XIRR across 3Y, 5Y, 7Y, 10Y, and 12Y horizons — lead of roughly 1.8 percentage points at 10Y (18.16% vs 16.82%) — indicating sustained outperformance versus peers. Calendar year returns show good consistency, with 11 of 13 years positive, strong up years such as 42.95% in 2021 and 37.91% in 2023, and only three mild negative years. The 12Y XIRR of 15.34% still exceeds the category average of 16.37%? No — it trails it, so longer-window relative advantage narrows in the weakest stretches.

This fund suits investors seeking diversified large and mid-cap exposure with above-category long-term compounding and a 7-year or longer horizon to ride the periodic drawdowns. Its 2026 return of -6.7% and history of negative calendar years (2018: -2.91%, 2015: -4.93%) mean investors must tolerate multi-year flat or negative stretches. A moderate-to-high risk tolerance is appropriate given the mid-cap component, though the fund's below-100% downside capture offers somewhat better protection than the index itself.

• Consistent positive alpha versus NIFTY 50 across all windows, peaking at 7.24% over 7Y
• SIP XIRR above category average at every horizon from 3Y through 10Y, including 19.26% (5Y) vs 18.04% category
• Favorable capture asymmetry: downside capture of 91.06%-95.4% paired with upside capture near or above 100%

• 1Y SIP XIRR of 9.38% trails the category average of 11.01%, and calendar 2026 returned -6.7%
• Heavy combined financials exposure (~25% across Banks and Finance) creates concentrated sector risk
• 12Y XIRR of 15.34% falls below the category average of 16.37%, showing relative edge narrows over the longest horizons