Let’s say you are planning to buy a new house. Or perhaps looking to save for your child’s higher education, or thinking of building a retirement corpus. All of these require a significant amount of money, and that is where investment plays an important role.
For all the above needs, mutual fund investment can be your best bet. And, if you are a cautious investor, you can consider large-cap mutual funds. Let us take a look at what are large-cap mutual funds to get a better picture.
Large-cap mutual funds
Large-cap mutual funds invest in companies having a large market capitalisation. These companies are known to have a solid track record, secure business, stable growth prospects, higher market share and steady management. Moreover, these companies also pay regular dividends to their shareholders. Therefore, in comparison to small or mid-cap companies, these companies tend to remain more stable during market swings.
Large-cap mutual funds are known to offer stable and consistent returns over a period of time. They are an ideal investment option for investors having a low-risk tolerance and willing to earn decent returns without being exposed to market volatility.
Before you decide to invest in mutual funds, read on to know the benefits of mutual fund investment.
Benefits of investing in large-cap mutual funds
- Large-cap mutual funds are known to provide satisfactory returns to investors in the long run.
- They generate predictable and low-risk returns.
- Investing in large-cap mutual funds can build steady wealth over a period of time.
- These funds invest in large companies that pay out dividends regularly.
- Large-cap mutual funds have the potential to handle market volatility efficiently.
- Since 80% of the corpus of large-cap mutual funds is invested in large companies, they are regarded as a relatively safer investment option.
- It is an ideal investment avenue for investors having lower risk tolerance.
- You can invest in large-cap mutual funds via one-time investment or SIP route.
- Large-cap mutual funds have the capability of withstanding a bear market.
- You can gauge the performance of large-cap mutual funds as they have a historical track record.
Those mentioned above are few of the large-cap mutual fund benefits. Although large-cap mutual funds provide stable returns, it can help to know they may not give very high returns in a bull market. However, they hold the potential of beating market volatility.
Before investing in large-cap funds, it is advisable to analyse your investment goals, risk appetite and investment horizon. Gauge the level of risk you can bear and the kind of returns you expect from your investment. If you are a conservative investor willing to invest in mutual funds online without exposing your corpus to market fluctuations, consider large-cap funds.