Why should large caps be part of your investment portfolio? Experts answer

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foreign institutional investors (FIIs) and domestic institutional investors (DIIs). These institutions possess extensive research capabilities and engage in investments only following meticulous analysis, thereby enhancing the well-researched nature of large-cap stocks. Engaging in individual stock investments demands thorough research and analysis, a process that can prove time-consuming and daunting for many investors.

The challenge lies in identifying the appropriate stocks to include in their investment portfolios. This is one reason why opting for large-cap mutual funds may be a preferable choice compared to directly purchasing stocks in this sector.

Also Read: Top performing mutual funds of 2024 based on past returns. Should you invest too? Large-cap companies, owing to their size, brand recognition, and diversified revenue streams, frequently exhibit more resilience in the face of economic downturns when compared to smaller counterparts.

This results in reduced volatility within large-cap funds, although it’s important to note that they are not entirely impervious to market fluctuations. The majority of large-cap funds focus on investing in companies boasting significant market capitalization, often recognized as “household names". These companies typically stand as well-established leaders in their respective industries, demonstrating a proven track record of stability and profitability.

Suresh Sadagopan, Founder, Ladder7 Wealth Planners shared, “A large-cap fund comes with a lower risk among equity investments. The underlying investments of equities are some of the biggest category leaders among the industry segments they represent. Large-cap funds are an excellent way to participate in Equity funds while