This is what you need to know before investing in Large Cap Funds
Equity Mutual Funds can be classified based on the market capitalization of the companies in which the funds are invested. Market capitalization is derived by multiplying the outstanding number of shares with the market price. The common types of funds include Large Cap, Mid Cap, and Small Cap, among others.
Now let’s have a closer look at Large Cap Funds.
Understanding Large Cap Funds
These are Open Ended Equity Mutual Funds that significantly allocate their assets in the equity shares of the top 100 companies in terms of market capitalization. A minimum of 80% of their net assets is invested in equity and equity-related instruments. These funds typically invest in companies forming part of sectors like financial services, consumer goods, pharma, healthcare, infrastructure, information technology, and others.
Why Large Cap Funds are most preferred?
These funds are also preferred for their relatively lower risk and potential of generating consistent returns, thereby providing for stability in one’s portfolio.
What You Need to Know About Taxation
Dividend Distribution Tax
Capital Gains Tax
Who Can Invest
Having understood about the Large Cap Funds, you may seek the professional advice of your Mutual Fund Distributor for selecting the Fund best suiting your investment preferences.