Large cap funds are those mutual funds, which seek capital appreciation by investing primarily in stocks of large blue chip companies with above-average prospects for earnings growth.
Different mutual funds have different criteria for classifying companies
as large cap. Generally, companies with a market capitalisation in
excess of Rs 1000 crore are known large cap companies. Investing in
large caps is a lower risk-lower return proposition (vis-à-vis
mid cap stocks), because such companies are usually widely researched
and information is widely available.
Large cap funds invest in those companies that have more potential of
earning growth and higher profit. One of the major advantages of large
cap funds is that they are less volatile than mid cap and small cap
funds and the near term prospects of large cap funds can be more
accurately predicted. On the flip side, the large cap funds offer lower
returns than mid cap or small cap funds. But when compared in totality,
large cap funds outperform all other funds. These funds come under low
risk low return category. In volatile times it is advisable to invest in
large cap funds.
Top Large cap Funds in India