What stocks are large cap growth?
Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large-cap. Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields).
Large cap refers to a company with a market capitalization value of more than $10 billion.
The S&P 500 Index is the benchmark even though it only focuses mainly on the large-cap market.
The first 100 companies ranked according to their market capitalization by the stock exchanges are known as large cap companies. These stocks have a market cap of more than Rs. 20,000. The companies with rankings from 101 to 250 are known as mid cap companies.
As of April 2024 Tesla has a market cap of $536.71 Billion. This makes Tesla the world's 15th most valuable company by market cap according to our data.
As an asset class, large-cap growth stocks offer relative stability, great capital appreciation potential and, in many cases, a good dividend income – all very attractive qualities to have in a long-term investment.
Large-cap stocks are generally considered to be safer investments than their mid- and small-cap stock counterparts because they are larger, more established companies with a proven track record. Some of the biggest names in business are large-cap stocks – Apple, Microsoft and Alphabet, for example.
The large cap stocks are the stocks of top 100 companies, ranked according to their market capitalisation. The average one-year return given by large cap mutual funds stood at 16.15 percent as on December 21, 2023, reveals the MorningStar data.
The largest Aggressive ETF is the iShares Core Aggressive Allocation ETF AOA with $1.81B in assets. In the last trailing year, the best-performing Aggressive ETF was AOA at 14.23%. The most recent ETF launched in the Aggressive space was the iShares ESG Aware Aggressive Allocation ETF EAOA on 06/12/20.
As of April 2024 Apple has a market cap of $2.614 Trillion. This makes Apple the world's second most valuable company by market cap according to our data.
Should you buy large cap stocks?
Large-cap stocks tend to be companies that are established in their markets with long-term histories. Some feel this makes them “safer” to invest in. Larger company stocks also often pay dividends, allowing you to capture some of the return of your investment, which some investors view as a benefit.
Large-cap funds are less risky than small and mid-cap funds. Small and mid-cap funds have higher growth potential than large-cap funds. Large-cap funds are good for conservative investors. Mid and small-cap funds are suitable for medium-risk takers to aggressive investors.
Dubbed the Magnificent Seven stocks, Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms and Tesla lived up to their name in 2023 with big gains. But the early part of the second quarter of 2024 showed a big divergence of returns.
The “Magnificent Seven” might sound like the title of an old Western film or what a large family might name its group chat, but in finance the moniker is being used to describe a group of high-performing tech stocks: Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta and Tesla.
The grouping of technology stocks known as the Magnificent Seven got a bit of its shine back this week after some upbeat earnings reports. Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla have added a collective $686 billion in market value on the week.
Key Points. Microsoft is the largest company in the world, with a market cap of $3.13 trillion. It's followed by Apple ($2.65 trillion), Nvidia ($2.26 trillion), Saudi Arabian Oil ($1.98 trillion), and Amazon ($1.89 trillion).
Low Capital Appreciation
While these stocks can provide stability and dividend income, they might not offer the same level of capital appreciation as smaller, more growth-oriented stocks. This can be a drawback for investors looking to maximize their returns, especially over shorter investment horizons.
As of April 2024 NVIDIA has a market cap of $2.071 Trillion. This makes NVIDIA the world's third most valuable company by market cap according to our data.
To find an appropriate investment mix for your time horizon, find your age and the corresponding portfolio allocation. A typical mixture could include 60% large-cap (established companies), 20% mid-cap/small-cap (small to medium-sized compa- nies), and 20% international (companies outside the U.S.) stocks.
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. This is due to the established track record and stability of the companies they invest in."
Should I invest in a small, mid, or large-cap?
Large caps, typically representing established and stable companies, offer stability and lower risk. On the other hand, small caps and mid caps, being more volatile, present higher growth potential along with increased risk. Understanding and balancing the mix of these investments can help manage risk effectively.
Research shows that small-cap stocks have yielded higher returns than large-cap stocks due to their inherent riskiness. Any company with a market capitalization rank beyond 250 is classified as a small-cap company.
Average Return. In the past year, QQQ returned a total of 39.12%, which is significantly higher than VOO's 27.70% return. Over the past 10 years, QQQ has had annualized average returns of 18.40% , compared to 12.59% for VOO. These numbers are adjusted for stock splits and include dividends.
The best-performing ETF in the last 10 years was VanEck Semiconductor ETF (SMH).
The S&P 500's track record is impressive, but the Vanguard Growth ETF has outperformed it. The Vanguard Growth ETF leans heavily toward tech businesses that exhibit faster revenue and earnings gains. No matter what investments you choose, it's always smart to keep a long-term mindset.
