Getty ImagesLarge cap mutual funds invest in stocks of very large companies. According to Sebi's new categorisation norms, large cap mutual fund schemes have a mandate to invest at least 80 per cent of the corpus in top 100 companies by market capitalisation.
Market capitalisation, commonly called market cap, is the market value of a publicly traded company's outstanding shares. Market capitalization is equal to the share price multiplied by the number of shares outstanding. These companies are typically the leaders in their respective business and are relatively stable than smaller companies during volatile phases in the market.
Large cap mutual funds are suitable for 'conservative' equity investors. Note, conservative equity investors are different from conservative investor. Conservative equity investors have the risk appetite to invest in stocks, but they want to create wealth without taking too much risk or exposing their investment to a lot of volatility.
Market capitalisation, commonly called market cap, is the market value of a publicly traded company's outstanding shares. Market capitalization is equal to the share price multiplied by the number of shares outstanding. These companies are typically the leaders in their respective business and are relatively stable than smaller companies during volatile phases in the market.
Large cap mutual funds are suitable for 'conservative' equity investors. Note, conservative equity investors are different from conservative investor. Conservative equity investors have the risk appetite to invest in stocks, but they want to create wealth without taking too much risk or exposing their investment to a lot of volatility.
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