What Does A Large Cap Mutual Fund In India Mean?

When we talk of a large cap fund, we are essentially talking of a mutual fund that invests a large part of its money in the companies with a large market capitalization.

Types of mutual funds in India

Based on an investment strategy, there can be mutual funds that invest in equities in large cap, small cap or mid cap funds.

Now, we are not talking of debt funds here, but, purely equity mutual funds. Debt funds are not mandated to invest in equities.

So, as mentioned, there are three types of equities that mutual funds can buy. These include the large cap funds. Capitalization is got by multiplying the number of equity shares by the current market price.

For example, if a company has 100 number of shares and its current market price if Rs 10, then the market capitalization of the company would be Rs 1,000.

So, large cap would be stocks that have a large market capitalization and this would change from time to time.

Which are the stocks that large cap mutual funds invest in?

So, large cap mutual funds would invest in stocks like Reliance Industries, ICICI Bank, ITC, HDFC Bank, State Bank of India and the other stocks that form a part of the NSE Nifty or the BSE Sensex. They would also include the top BSE 100 or the NSE 100 companies in India.

There are many large cap funds in India, including HDFC Equity Axis Equity, Birla Sun Life Frontline Equity Fund etc.

They might also invest in some other cap companies or even in debt temporarily. It all really depends on the mandate that these large cap funds in India have been mandated to do.

List of some large cap companies in India

1) SBI Blue Chip Fund
2) BNP Paribas Equity Fund
3) DSP Blackrock Focus 25 Fund
4) L&T Equity Fund
5) SBI Magnum Equity Fund
6) Baroda Pioneer Growth Fund
7) ICICI Prudential Select Large Cap Fund
8) JPMorgan India Equity Fund
9) UTI Top 100 Fund

There are many more large cap funds, but, we have selected just a few.

How to choose a large cap mutual fund?

Essentially, you can choose from a list based on various parameters. Value Research Online, gives a ranking, based on various parameters. You can go by those rankings. You can also look at the Crisil rankings, which again is based various parameters. Apart from this you can look at the past track record of the fund, dividend paying capacity etc.

At times it may be necessary to seek professional help before investing.

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