What Does Large Cap (Big Cap) Mean?

Business & Management
#1

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.

#2

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.