How much of your equity should be in large, mid and small cap?

Last reviewed: 22 Oct 2026 · Noema Research · 7 min read

Most fixed splits ignore how long you'll stay invested and how big a fall you can live with. Start from your time horizon: the longer it is, the more mid and small cap you can hold. Then cut that share if a deep fall would make you sell. With 10 or more years and an average tolerance for falls, our planning range is 50–60% large cap, 25–30% mid cap and 10–20% small cap, trimmed if the fall it implies is bigger than you could sit through. Under 5 years, the question is how much equity to hold at all.

Create an account to map this answer against your salary allocation.

Find your equity mix

Start with the years left and the fall you could hold through.

Example values

Equity amount (₹)Monthly SIP into equity (₹)Years until you need this money (years)Biggest fall you could sit through (%)Past fall to test againstCurrent large / mid / small (%)

Estimate

Your equity mix: Large 55% · Mid 30% · Small 15%

Planning range for 12 years: large 50–60%, mid 25–30%, small 10–20%.

In a fall like 2020, ₹10,00,000 could have dropped by about ₹3.9 lakh. Your ₹20,000 SIP: ₹11,000 large, ₹6,000 mid, ₹3,000 small.

Even large caps fell more than this in that period. Hold less in equity. Decide your equity share first.

Estimate, not a prediction.

Large cap₹55

Mid cap₹30

Small cap₹15

Suggested equity mix, percentages.

Estimate, not a prediction · View as table

What large, mid and small cap mean

Fund labels sound like risk ratings, but they are company-size groups set by SEBI: the 100 largest companies, the next 150, and the rest. Smaller companies tend to rise and fall more.

Why fixed splits mislead

A split copied from someone else ignores when you need the money. Someone needing it in 6 years and someone with 20 years left should not hold the same small cap share.

Start with your time horizon

Our planning range, not a rule

Years	Large cap	Mid cap	Small cap
Under 5	Decide equity share first	—	—
5–6	70–80%	15–25%	0–10%
7–9	60–70%	20–30%	5–15%
10 or more	50–60%	25–30%	10–20%

Under 5 years, set your equity share first.

Then test the size of fall

The right mix is one you will still hold in a bad year. Selling after a fall turns a temporary loss into a real one. See what to do after a fall.

Past falls, NSE total return indices, daily closes

Period	Nifty 100	Midcap 150	Smallcap 250
2008	−61.1%	−72.9%	−75.6%
2018–19	−14.9%	−24.4%	−42.0%
2020	−37.9%	−38.5%	−43.5%
2024–25	−17.2%	−20.9%	−26.0%

Measured from the January 2018 peak to March 2020, small caps fell −59.8% and mid caps −43.1%.

How to move to your mix

Selling to rebalance can mean tax. Direct new SIPs to the part that is short first; sell only what's left over, and use your yearly ₹1.25 lakh long-term gains exemption.

Common mistakes

Adding small cap after a strong year.
Counting a flexi cap or multi cap fund as one bucket without checking what it holds.
Owning several funds in the same category and calling it diversified.
Rebalancing so often that tax and exit loads eat the benefit.

FAQ

What is a good large, mid and small cap ratio?+

It depends on your time horizon and how big a fall you can hold through. With 10 or more years, our planning range is 50–60% large, 25–30% mid and 10–20% small cap.

How much small cap is too much?+

More than you could hold through a deep fall. For money needed within 5 to 7 years, our range keeps small cap at 10% or less.

Do I need all three?+

No. A large cap-only portfolio is reasonable for shorter horizons; mid and small cap are optional additions for long horizons.

How often should I rebalance?+

Once a year, or when a part drifts more than about 10 points from its target, is enough for most investors.