KNOWLEDGE CENTRE Equity Mutual Funds / What Is Large Cap Fund?

What Is Large Cap Fund?

What are large cap funds?

Do you find investing in stocks to be too risky? Try investing in large cap funds and get the returns from the stock markets with the help of professional managers. There are many types of funds available for investment. Large Cap Funds are one type of mutual fund that is accessible in the market.

What are Large Cap mutual funds?

These are also described as Blue Chip funds which have a huge market capitalization. Companies, with a market capitalization more than Rs 1000 crore are known large cap companies. These stocks have lower risk and give average returns. Large cap funds are those mutual funds, which try capital appreciation. By spending in stocks of large blue chip companies there is a high chance for earnings and growth. Different mutual funds have different criteria for listing companies as large cap funds. Investing in large cap funds is a lower risk and lower return proposition.

What are the benefits of large cap mutual funds?

Large-cap funds have more potential for earning growth and immense profit. One of the important advantages of large cap funds is that they are less resilient than mid-cap funds & small cap funds. The near-term prospects of large cap funds can be more predicted.

On the flip side, the large cap funds offer cheap returns than mid cap or small cap funds. But when benefits of mutual funds are analysed in totality, large cap investment funds outperform all other funds. These funds come under low-risk low return category. In volatile times, it is prudent to invest in large cap funds.

When you compare the performance of large caps funds with mid-caps at the time when the markets were playing poor, the mid-caps got fired off from all the ends. The large cap funds reserved average returns for the investors. The major point is these funds do not get beaten up during market fluctuations. The average three-year returns given by these are between 50 % to 60% which is a fair return on investment for the investors.

The market in these large cap mutual funds has been projected at roughly ten billion dollars. This market is full of experts that specialize in long-term invests and is often more expensive to get started. Since these investments are for longer terms, you lose less money and are a bit less shaky than small cap stocks.

Due to sheer numbers of engaged buyers and sellers, large cap mutual funds lead to trade in a systematic manner. They trade in tandem with the ubiquitous market to a large extent, you can check positions.

How to invest in Large Cap mutual funds?

When you’re building your mutual funds portfolio, you must make sure that you can spread your investments. To build up your portfolio, integrate both small cap mutual funds and large cap funds. If you are a beginner or an investor who avoids risks, then large cap investment funds may be for you. Some investors prefer the long term, investment and others enjoy the lower risks.

Regardless of the type of funds that you intend to pursue, get help from the trained experts before you take action. Whenever you are making an investment, you must consult with someone who can isolate your risks as well as your benefits. So, that you have a clear portrait of what to expect.

Any choose that you choose, investing in it is made easy by Angel Bee app. Within minutes you can start investing, with no paperwork. If the process of choosing seems tedious to you, so can use ARQ, the AI based investment engine that will help you pick the funds best suitable for you. Happy investing!

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