There are many features of Large Cap Funds, mainly some of the features we describe below. These funds are invested in highly rated and well-reputed brand companies. Hence, investing here is considered to be somewhat safe and the returns are good in the long term as compared to other investment options.
Why should one invest in Large Cap Fund?
Indeed this is the question of investors why should invest in large-cap funds? These funds invest in stocks of the top 100 companies, which reduces the risk very much and you are likely to get maximum returns according to the best performance of the companies in the long term, that’s why you should invest in these funds.
Regular and Stable Returns
These funds provide stable returns to the investors in the long term hence most of the investors are attracted to invest in these funds. Higher returns depend on the fund scheme in which you invest so you must know about the fund scheme from the fund manager.
Lower risk as compared to small and midcap funds
Unlike small-cap and mid-cap schemes, the NAV of large-cap funds does not fluctuate much. Hence, investing in large-cap schemes brings stability to your investment portfolio and reduces risk due to good reputation and management. Low risk is one of the key features of large cap mutual funds which give good returns to the investors.
Fund Management by Experts
Large cap funds invest in top 100 companies by market capitalisation. Hence, these funds are managed by highly qualified individuals. Individuals who have good knowledge of stock market and financial market and experience of at least 10 years are appointed to manage these funds who do proper research and invest your money in large cap fund companies Are.
Best for long term investment goals
Large Cap Funds are long term investment feature funds that have the potential to deliver best returns over 5 or more years. The general understanding is that if you stay invested for more than five years, you can expect returns of around 15-30%. Therefore, large-cap mutual funds are generally recommended for investors with a long-term investment horizon.
SIP option available
SIP plan is the best feature of investing in large cap funds which gives freedom to the investors to invest as per their investment capacity. Investors can opt for Systematic Investment Plan (SIP) and invest as per their convenience. For which investment is required to be made in installments from time to time on a pre-determined date.
Invest money in reputed companies
In Large Cap Fund, your money is invested in very famous and well-known companies. In which the risk is almost the least due to public identity and the returns are very good in the long term. Hence it is an important feature of large cap funds that allow investors to include stocks of top 100 companies in their portfolio.
Minimum commission fee on investments
Mutual fund companies pool money from a large number of people, so they charge very low fees. Like all mutual funds, large cap mutual funds come with low expense ratios so that your investments are well managed and help in balancing higher profits.
Investment transparency and flexibility
Large cap companies are generally transparent, making it easier for investors to find and analyze public information about them. This is the best feature of large cap funds, so all investments are in front of you at the end of each trading day.
Inflation Beating Returns Over Long Term
Large-cap funds predominantly invest in equity instruments of top 100 companies listed in the stock market. Thus, they have the potential to earn higher returns than debt funds, hybrid funds and other traditional options, hence providing inflation-beating returns with minimal risk.
Investment Automatic Rebalancing Features
One of the key features of mutual funds is the automatic rebalancing which keeps on growing the portfolio while reinvesting the profits earned by you. The fund manager rebalances the portfolio when needed and saves the time and effort required to track the markets and manage asset allocation.
Best for new and low risk investors
Large cap funds invest in reputed companies, so these funds are considered the best option for new and low risk investors. These funds are suitable for new investors, especially for investing in equity shares. He will get exposure to equity funds but due to the diversified portfolio the risk is not much during the rise and fall of share prices.
These funds are the best funds for new investors which provide maximum output over a long period of time with minimum risk. But due to the high equity exposure in your fund portfolio, please go through these funds in brief before investing, so that you are completely satisfied and do not suffer any unnecessary financial loss in future.