Tipping Point: Is this a good time to opt for large-cap funds?

Large-cap funds are showing a category average return of 13.21 per cent over the past year. Many investors have asked us whether this is the right time to enter large-cap funds. Investors often tend to chase categories that are showing good past performance. This should be avoided. Instead, if you have a five-seven-year horizon, enter equity funds. Build a diversified portfolio spread across market caps, instead of chasing only one category. An investor with a moderate risk appetite may have 70 per cent allocation to large-cap funds, 20 per cent to mid-cap funds, and 10 per cent to small-cap funds.