Here is a collection of must-see videos that will help you understand the world of mutual funds. Happy Investing!

Financial discipline is similar to going on a diet. It is never easy. There are plenty of temptations - an urge to over spend, letting emotions control your investments and confusion due to the problem of plenty - look at the plethora of options available in the market, with the returns of one scheme trying to beat the other. Who does one turn to for advice? Dependency on one person or your financial advisor alone is also tricky. Which is why people often turn to mutual funds.

The argument here is that experts are taking care of your investments. Depending on your investment appetite and risk appetite, mutual funds come with a good mix of both equity and debt, which helps you earn an interest of 12-15% or more depending on the type of investment schteme you have picked and how the markets have performed overall. Yet, selecting a mutual fund can be confounding due to the raft of choices available.

Episode 41 I Expert

Large-Cap funds

Funds are categorised as large-caps, mid-caps and small-caps on the basis of market capitalisation. The definition of market capitalisation is the market value of all outstanding shares of a particular company. The value here is derived by multiplying outstanding shares of the company with the market price of each share.

Market Capitalisation = Current Stock Price x Number of outstanding shares.

The Securities and Exchange Board of India (Sebi) defines large caps as the largest 100 companies in terms of market capitalisation.

Large-cap funds invest a larger proportion of their corpus in companies with large market capitalisation, though the criteria for large-cap companies may vary from company to company. Large cap funds hold a reputation to offer stable and sustainable returns over a period of time but are generally outperformed by small and mid-cap funds which have higher risk exposure.

The companies in this category hold a strong, trustworthy and well-established reputation. Institutional investors are more likely to invest in such companies for the long-term to create wealth. These funds are least risky when compared to other asset classes but bring in lesser growth when compared to its mid-cap and small-cap peers.

Large-cap funds are best suited for investors who are looking for stability and have a low-risk appetite. A large-cap fund is highly tapped by institutional investors as they are known to offer stable and sustainable returns over a period of time with low risk.

Many large-cap companies are blue-chip stocks which pay a dividend, have lesser debt and a long history of stable earnings. Each time there is a market downturn, investors rush towards the large-cap safe heaven as large caps can withstand a slowdown without going out of business. So if you are looking for stability with good returns over the long-term, investing in large-cap funds could be a good bet.