Definition
Large-Cap Fund
A large-cap fund invests at least 80% of its money in the top 100 companies by market capitalisation. These are India's biggest, most established businesses.
Per SEBI rules, the universe is defined by AMFI's list, where companies ranked 1 to 100 by full market capitalisation are classified as large-cap. Funds in this category must hold a minimum of 80% in such stocks at all times.
Large-cap funds tend to be relatively stable because blue-chip companies like those in the Nifty 50 are less volatile than smaller firms. They suit conservative equity investors who want long-term growth with lower swings, though returns may be more modest than mid- or small-cap funds during bull runs.
Related terms
- Market CapitalizationMarket capitalisation is the total market value of a company's shares, calculated as share price multiplied by the number of shares outstanding.
- Mid-Cap FundA mid-cap fund is an equity scheme that invests at least 65% of its assets in companies ranked 101 to 250 by full market capitalisation.
- Flexi-Cap FundA flexi-cap fund invests at least 65% in equities but can move freely across large-, mid- and small-cap stocks based on the fund manager's view.
- Small-Cap FundA small-cap fund invests at least 65% of its assets in companies ranked 251st and below by full market capitalisation — smaller, often under-researched businesses.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.