Large cap, mid cap, small cap, flexi cap: what's the difference?
SEBI ranks listed companies by market value: the top 100 are large caps, the next 150 (101 to 250) are mid caps, and the rest (251 onwards) are small caps.
Large cap funds invest mainly in large, established companies and are relatively stable. Mid cap funds invest mainly in mid-sized companies, with higher growth potential and bigger ups and downs. Small cap funds invest mainly in small companies and are the most volatile, best held for 7 years or more.
Flexi cap funds can invest across all company sizes as the manager sees fit. Multi cap funds must hold a minimum share in each of large, mid and small caps. Large & mid cap funds hold a significant share in both. Exact minimum limits are set by SEBI and given in each scheme's documents.
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