A firm having a market capitalization of more than $10 billion is referred to as a large-cap (or “big cap”). The term “big market capitalization” is abbreviated as “large-cap.” The market capitalization of a firm is derived by multiplying the number of outstanding shares by the stock price per share. The stock of a firm is categorized as the big cap, mid-cap, or small-cap.
A large cap fund is a category of funds that invests majorly in companies with large market capitalisation.
If you are thinking about investing in mutual funds for the first time, large cap funds can be a very good option. These funds have proved to be excellent wealth creators in the long term. The cap in large-cap funds refers to market capitalisation. Large cap funds have been both steady and sustainable in terms of generating returns and have endeared themselves to investors.
Large cap companies are believed to be more trustworthy, enjoy a strong reputation, and are financially strong
They have been operating in the market for some time. So, they have a track record
Because of their size and organisational complexity, these companies follow strong corporate governance practices. Investors who put their money in such companies see a slow and gradual rise in their wealth over the long term
There are plenty of research studies on these corporate organisations in the market.