Anand Rathi Insights

Large Cap Mutual Funds: AN Investor’S Guide

What are Large Cap funds?

Large cap mutual funds are a type of mutual fund that invests primarily in the stocks of large companies in India, which are typically defined as top 100 companies in terms of their market capitalization. These funds aim to provide investors with long-term capital appreciation by investing in high-quality, established companies with a strong track record of performance.

Why should one Invest in a Large Cap Mutual Fund?

There are several reasons why investors may choose to invest in large cap mutual funds:

Stability and Consistency:

Large cap companies are typically well-established and have a proven track record of performance and have consistent returns, which makes them less risky than mid-cap or small-cap category. This makes large cap mutual funds a good option for investors who are looking for stability and consistency in their investments.


Large cap companies tend to be more liquid than mid-cap or small-cap companies, which means that their stocks can be bought and sold more easily. This makes large cap mutual funds a good option for investors who may need to access their funds quickly.


Large cap mutual funds invest in a diversified portfolio of large companies, which helps to spread out the risk and reduce the impact of any single company’s performance on the fund's overall returns.

Tax Benefits:

Investing in mutual funds, including large cap mutual funds, can offer tax benefits to investors in India. For example, long-term capital gains on equity mutual funds are currently taxed at 10% in India if held for more than one year.

Professional Management:

Large cap mutual funds are managed by professional fund managers who have expertise in selecting and managing stocks. This can be beneficial for investors who may not have the time or knowledge to manage their own investments.

As investors navigate the large number of the schemes available in the market, acomprehensive thought-process and financial expertise offered by reputed wealth solution providers becomes crucial. Investors can seek out guidance from experts who can help with analysing funds that are better suited for their investment strategy.