Understand Large-Cap Funds

Definition
Large-cap funds or also known as the large-capitalization or big-cap funds, generally invests in companies with greater market values. It is less volatile as compared with funds that invest in small companies. Smaller returns can be expected, but lately, large-cap can outperform all others. That is why many investors run for the relative stability of large and established companies.

Advantage of investing into large-cap funds
1. As compared to mid-cap funds, large-cap funds is less volatile.
2. It may offer low returns but on the other hand, it can outperform other funds.

Large-cap future performance
1. Large-capitalization growth stocks are likely to benefit more than any others.
2. large-cap fund is one of the best among those with substantial assets, meaning they have huge shareholder basis.
3. Large-cap portfolio performance holds stocks with more in market capitalization, with their weights reflecting their liquidity in the marketplace. It is generally selected from the outperform ratings.

Examples of large-cap where you can invest
1. HDFC Top 200
2. UTI Large Cap Fund
3. Franklin India Blue Chip
4. Kotak 30
5. DSPML Top 100 Equity
6. Principal Large Cap Fund
7. Reliance Growth Fund

Quote of the day:
Large-cap funds are mutual funds that seek capital appreciation by investing mostly on a high-quality common stocks issue of a leading company that pays regular dividends.

Best Readings:

• Difference between IPO and mutual funds
• Closed-end Mutual Fund
• Open-end Mutual Fund

Conclusion:
It is advisable to invest in large-cap funds especially when volatile times. Because of its less volatile characteristic and also offers greater growth potential than bonds.

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