alleryStart learning →Under SEBI categorisation, a Large Cap fund invests predominantly in stocks ranked
A1st to 250th by full market capitalisation
B1st to 100th by full market capitalisation
C101st to 250th by full market capitalisation
D251st and beyond by full market capitalisation
Answer & Solution
Correct answer: B. 1st to 100th by full market capitalisation
1. SEBI defines large cap companies as the 1st to 100th ranked by full market capitalisation.
2. Mid caps are the 101st to 250th ranked companies.
3. Small caps are the 251st and beyond by market capitalisation.
4. A Large Cap Fund must invest a minimum of 80 percent in large cap stocks.
_Source: NISM Series V-A: Mutual Fund Distributors Workbook (Dec 2019), Ch 2 "Concept and Role of a Mutual Fund", Box 2.1_
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