ET In The Classroom: Large-cap funds
large-cap funds. Their rationale is that these funds invest at least 80% of their portfolio in large companies where valuations are still reasonable, with the companies having established track records and strong management teams.
WHAT IS THE DEFINITION OF A LARGE-CAP FUND? As per regulatory guidelines, a large-cap company is a listed company which is ranked from 1st to 100th on the Indian stock exchanges in terms of market capitalisation. Hence, for a fund house, a large-cap scheme needs to invest at least 80% of its assets in large-cap companies, with the flexibility to invest the balance 20% in other companies as per the discretion of the fund manager
Best MF to invest
Looking for the best mutual funds to invest? Here are our recommendations.
View Details» <div data-placement=«Mid Article Thumbnails» data-target_type=«mix» data-mode=«thumbnails-mid» style=«min-height:400px; margin-bottom:12px;» class=«wdt-taboola» id=«taboola-mid-article-thumbnails-109177738»>WHAT ARE THE BENEFITS OF INVESTING IN LARGECAP FUNDS?
Large companies have strong promoters and experienced management personnel and typically have been in the business for a longer time. They are tracked by both Indian institutional as well as foreign investors and hence there is higher transparency and availability of reports on the performance and outlook of these companies in the public domain. These companies can attract the best banks and personnel, they have relevant skills and bandwidth to deal with tough economic environments and scenarios in a far better way than smaller companies. Large companies get access to funding much more easily than their smaller counterparts by virtue of their size and they can attract top industry talent. From a stock
