Large-cap funds invest in stocks which are classified as large-cap or those which have the highest market capitalisation.
According to the new Securities and Exchange Board of India guidelines, schemes classified as large-cap can invest a minimum of 80% of their assets in the top 100 listed stocks. This defines the large-cap universe as the top 100 stocks by market capitalisation listed on exchanges. The rest 20% can be invested in mid- or small-cap stocks. These large-cap stocks are also known as bluechips and usually represent companies which are market leaders in their respective sectors or industries.
