Large Cap Fund — Mutual Fund Term Explained

A fund investing at least 80% in the top 100 companies by market cap. Lower volatility with stable blue-chip exposure.

SEBI mandates large cap funds to invest at least 80% in the top 100 companies by full market capitalisation — India's biggest and most liquid companies.

Less volatile than mid/small cap, good for first-time equity investors. Over long periods, they often produce returns close to Nifty 50 index funds.

Related terms

• Mid Cap Fund — A fund investing at least 65% in companies ranked 101-250 by market cap. Higher return potential than large cap but significantly more volatile.
• Small Cap Fund — A fund investing at least 65% in companies ranked 251+ by market cap. Highest return potential but most extreme drawdowns. Requires 10+ year horizon.
• Index Fund — A passively managed fund replicating a market index like Nifty 50. Ultra-low cost (0.05%). Most active funds underperform over 10+ years.
• Benchmark — The market index a fund is compared against. A fund manager must beat the benchmark consistently to justify active management fees.

Browse the full mutual fund glossary, or see this concept in action in the fund screener.