We all wish to earn high returns on our investments, don’t we? But do we keep the patience that is required to earn them? Well, the answer is obviously a big NO. We desire more money, but we don’t want to wait. But we need to accept the fact that sowing the seeds doesn't bear fruits overnight. Patience is the key, letting the stalks bud out and mature into golden fields. But having said that, what is exactly the solution to earn good returns over the long-term horizon? Well, the reply is, “Invest in Large Cap Mutual Funds”. In the world of mutual funds, the word ‘Large Cap’ denotes the big market share, or the size, of a listed company. In this article, we will discuss in deep about what these funds are and how can they be a good investment choice.
What are They?
Large cap funds are basically those funds that invest the money of the clients in the stocks of well-known companies that have a firm grip in the market and are considered as a secure route to get invested in mutual funds. It is righteously said that, “Wait is worth”, and aptly fits in the context of large cap funds investment since the investors plough great rewards after a long period, and the wait sometimes wins returns which may be as high as four times the amount initially invested, when these funds are in close proximity to their maturity period.
To further expand our knowledge about Large Caps, let’s also understand what large companies are with the help of three ‘R’s: -
- Reliable
- Renowned and
- Robust
These companies hold a very reputable position in the market and bask in the glory of a remarkable track record. They incorporate strong corporate-governance in their activities and build wealth for their investors over the long-term, slowly but steadily. In other words, they belong to the celebrity class and do a strong market research every time. So, funds that majorly invest their corpus in these companies are referred to as Large Cap funds.
Why Should You Invest in Them?
Well, it’s not hard to explain. Large Cap Mutual Funds hold the prize for being a deluxe vehicle for investing as they give attractive returns, and hold on to keep a track record of consistent performance that eventually compounds with time.
Not satisfied yet? Well, here’s another reason for you to consider them as a friendly investment option. They are known to pay steady dividends that turns out to be another source of income for the investors, if they opt for dividend schemes. Thus, even when the market is struggling with recession, the investors would keep on enjoying dividends at periodic intervals.
Want something more to get convinced? There you go!
- Lower Fluctuations: Since they belong to the realm of Equity mutual fund, they out to be volatile, but in comparison to Small and Mid-Cap funds, they lag behind in volatility by a bold distance. They are a good investing medium for those who wish to grind out advantage of equity investments, but do not want their returns to get hurt by market fluctuations.
- Steady Returns: Since Large Caps are poised funds, they offer lucrative returns over the long-term and do not fluctuate much in comparison to other equity fund categories. However, this does not make these funds immune to any decline, but they are more likely to withstand the downturn.
By popping these tasty nuggets of information in mind, it’s impossible for a smart investor to skip investing in these funds. MySIPonline provides an online platform to invest in the best large cap funds. So, invest today for a wealthier tomorrow.
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