Gone are the days when the term ‘Mutual Fund’ was a less accustomed term. People were becoming familiar with investments & investment avenues. Soon the popularity of Equity, Debt & Hybrid mutual funds came into existence.

When it comes to investing in equities, it can be a challenging endeavour. Choosing the right fund with the right combination of stocks, quality fund managers, and good performance can be challenging. It is important to consider the market capitalization or size of the company when selecting an equity portfolio. In the end, market capitalisation affects the benefits and risks of investing in a company. Market capitalisation is also used to categorize equity mutual fund schemes - large-cap funds, mid-cap funds, small-cap funds, multi-cap funds, etc. 
In this article, we'll discuss some of the must-know features of Large Cap Mutual Funds.

What are Large-Cap Funds?

Large-cap funds are a popular investment choice in India, known for their stability and growth potential. These funds primarily invest in stocks of large-cap companies, which are well-established and have a strong market presence. According to SEBI's classification, large-cap mutual funds are equity funds that invest at least 80% of their total assets in large-cap equities. Large caps are the top 100 publicly traded firms based on market capitalization. They are also referred to as blue-chip companies.

Large-cap mutual funds invest heavily in these companies, making them less susceptible to market fluctuations. As a result, as compared to other pure equity funds such as mid-cap, small-cap, and multi-cap funds, large-cap funds are low-risk investments.

How Do Large-Cap Funds Operate?

Large-cap funds pool money from various investors and invest it predominantly in stocks of large-cap companies. Fund managers responsible for large-cap funds analyze market trends, economic indicators, company fundamentals, and other relevant factors to make informed investment decisions. The goal of these funds is to provide investors with capital appreciation over the long term while maintaining a relatively lower level of risk compared to mid and small-cap funds.

What are the benefits of Large-Cap Funds? 

Large-cap funds play a vital role in the Indian mutual fund landscape, offering investors stability, lower volatility, liquidity, growth potential, and dividend income. Whether you are a conservative investor seeking stable returns or a long-term investor looking for growth opportunities with lower risk, large-cap funds can be an excellent choice for your investment portfolio.

However, it's essential to conduct thorough research and assess your investment objectives and risk tolerance before investing in large-cap funds or any other mutual fund scheme.

Disclaimer: The above information should not be relied upon for personal or financial decisions, and you should consult an appropriate financial professional for specific advice. The information presented under our newsletter and blogs is solely for informational purpose