Friday, March 11, 2011

Types of Mutual Funds: LARGE CAP FUNDS

Large cap funds are those mutual funds, which seek capital appreciation by investing primarily in stocks of large blue chip companies with above-average prospects for earnings growth. Different mutual funds have different criteria for classifying companies as large cap. Generally, companies with a market capitalization in excess of Rs 1000 crore are known large cap companies. Investing in large caps is a lower risk-lower return proposition because such companies are usually widely researched and information is widely available.
Large cap funds invest in those companies that have more potential of earning growth and higher profit. One of the major advantages of large cap funds is that they are less volatile than mid cap and small cap funds and the near term prospects of large cap funds can be more accurately predicted. On the flip side, the large cap funds offer lower returns than mid cap or small cap funds. But when compared in totality, large cap funds outperform all other funds. These funds come under low risk low return category. In volatile times it is advisable to invest in large cap funds. Large Cap Funds in India are a kind of mutual fund that looks for appreciation of capital by investing mainly in the shares of companies that are big blue chip. The big blue chip companies in which Large Cap Funds in India make their investments have above- average potential for growth in earnings. This ensures that the investments of the investors are relatively safe.
Top Large cap Funds in India:
·        HDFC Top 200
·        UTI Large Cap Fund
·        Franklin India Blue Chip
·        Kotak 30
·        DSPML Top 100 Equity
·        Principal Large Cap Fund
·        Reliance Growth Fund

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