Key Points
Numerous investors prefer large-cap stocks due to their stability, in contrast to the volatility associated with mid-cap and small-cap stocks..
The amalgamation of stability, diversification, and reduced volatility typically results in a lower risk profile for large-cap funds when contrasted with their mid-cap and small-cap counterparts..
Lower risk: Compared to mid-cap and small-cap funds, large-cap funds invest in well-established companies with larger market capitalizations..
Long-term growth: While offering lower potential returns than mid-cap and small-cap funds, large-cap funds can still provide consistent long-term growth over time..
While less probable, large-cap stocks and funds may still undergo price corrections stemming from broader market events, industry-specific shifts, or company-specific issues..
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Rebalance your equity portfolio with small cap mutual funds
19, Jun, 23Despite the underperformance of the equity mutual fund space, small-cap funds have done well in May, outperforming large- and mid-cap peers. Investors who are underweight on small-caps are advised to rebalance their portfolios by investing in them. Small-cap funds have received better inflows compared to mid-cap funds in the last two months, while large-cap funds have recorded net outflows of ₹1,362.28 crore ($184 million) in May. The current traction towards small-cap funds is due to attractive valuations in these stocks after their underperformance, according to Alekh Yadav, Head of Investment Products & Solutions at Sanctum Wealth.