Home Financial & Banking Terms What are Large Cap Funds?

What are Large Cap Funds?

Large Cap Funds

Large cap funds are those mutual funds which invest the greater proportion of their corpus in stocks of companies who have a large market capitalization. Market capitalization is the product of the number of shares outstanding and the market price of the share

Mutual funds invest the amount they have generated from the public in stocks as per the investment objective of that fund. For large cap funds, the investment objective is to invest mostly in stocks of large companies.

Large Cap Funds are Stable

Such funds are mostly stable as such companies have survived the start up stage and are comparatively stable. They are suited for people who want to have an exposure to the capital market but have limited risk appetite.

Since the performance of the stocks are relatively stable, one may not expect a very high percentage of return from such funds. They tend to offer some income and also retain the principal amount of the investors. Their performance are at times surpassed by the small and mid cap funds but those funds tend to fluctuate more often.

Good Yield

Large cap funds provide a good yield in the long term and the performance is generally stable not largely affected by modernization, expansion, changes in fiscal policies, monetary policies, etc.

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Sreya Ray is working as a Manager at State Bank of India. She is a voracious reader and a passionate writer. Her life is complete with her daughter and the support of her husband and the inspiration of her parents. Sreya loves multi-tasking and is a dreamer. If she don't create anything on a day,She feels that she had wasted my day.


  1. So is the large cap fund not affected by inflation or the high and lows of the market? Large cap funds are stable as compared to the mid and the small cap funds. They usually give the principal amount invested and are less risky. They surely sound a safe investment with little appetite for growth.


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