Large-cap Index Mutual Funds have emerged as stable and strategic financial instruments. These funds let you tap into the strength of large companies in a systematic way. Let us dig into the nuances of Large-cap Index Mutual Funds, looking at what makes them unique and the advantages they bring to investors.
What are large-cap funds?
Large-cap funds are mutual funds that invest in companies with a large market capitalization. According to the Securities and Exchange Board of India (SEBI), large-cap companies are those that are ranked in the top 100 based on their market capitalisation. These companies are typically well-established and have a proven track record of performance. Large-cap funds are considered less risky than mid-cap or small-cap funds, as they invest in companies that are more stable and have a lower risk of failure.
What are index funds?
Index funds track specific market indices, like Nifty 50 and Sensex, and the fund managers passively manage these funds. By replicating the composition of these indices, these funds provide a straightforward way for investors to participate in companies without the complexity of constantly picking individual stocks.
What is large-cap index mutual funds?
Large-cap index mutual funds are investment vehicles that replicate the performance of a specific large-cap stock market index. These funds follow various large-cap indices like NIFTY 50, SENSEX, NIFTY Next 50, NIFTY 100. They are cost-effective index funds designed to replicate the performance of the underlying index. Unlike actively managed funds, large-cap index mutual funds aim to match the returns of their chosen index rather than relying on the expertise of fund managers.