Flexi-Cap Fund

One way to judge the size of a company is called “market capitalization,” or “market cap.” It measures the total value of a company’s stock. Take the current stock price, multiply by the number of shares outstanding, and you get the market cap.

Mutual funds tend to specialize in particular market cap sizes. So...large cap funds focus on the big-time corporate giants: Apple, Amazon, etc. Small cap funds look for gems among (you guessed it) smaller players...up-and-comers, one-product firms, boutique players, etc.

There are a bunch of size groupings, things like mid cap or micro cap. Think: weight classes in boxing or MMA.

Flexi-cap funds don’t have to stick with any particular market cap. They don't have a single size they are mandated to specialize in. They can pick up stocks of any size; they get to ignore the weight classes.

Related or Semi-related Video

Finance: How do you Differentiate Betwee...13 Views

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- a la shmoop. how do you differentiate between large-cap mid-cap and small-cap

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companies? all right well people it's all about the

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cap ,so what is the cap again? no no this cap. that's market cap. market [woman holds graduation cap]

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capitalization or rather the value that Wall Street investors are placing on the

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company's future earning hours- that's how you kind of value companies right?

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well simply put to make categorizing investing in these companies easier,

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mutual funds and index funds have somewhat arbitrarily created brackets

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for the three different sizes of companies. the presumption runs that

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smaller companies carry more risk but grow faster than very large companies.

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they're more volatile and they appealed to a certain type of investor. medium

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sized companies well yeah there's somewhere in the middle, shockingly. and [3 company sizes listed]

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well yeah large cap they don't grow as fast a dividend usually and kind of they

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are what they are. so what are the numbers. well this is how they were

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created. the first gradation was started at a billion dollars or so and it ended

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at about five billion like below a billion it's like a nano cap. or it's a

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really small cap company and many companies grow through all three phases

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of small medium and large cap. take a Netflix- please for 995 a month they pay

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those four to say that. all right well Netflix came public at a valuation of [man speaks to camera]

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around 300 million dollars, really small small cap. it then grew and grew and grew

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from being a small cap company to a mid cap company when it passed the valuation

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of five billion dollars, and then continued growing to the large cap

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behemoth it is today at 50 billion plus. Netflix did well. so Netflix generally

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kept its number of shares outstanding flat-ish few options there it got that

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looted a little bit, and as a stock price rose the market capitalization rose, as

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well or said another way investors valued the company more and more highly.

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so Netflix graduated from being a small cap to being a mid cap, a half dozen [Netflix logo with stocks and investors pictured]

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years or so after it went public, and a half dozen or so years later it

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graduated past the twenty five billion dollar threshold to being considered

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a large cap company. today and there's another casual class called mega cap

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which generally comprises companies with market valuations over a hundred or two

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hundred billion dollars. these companies are behemoths like ATT

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Apple Amazon and many other companies whose names don't start with the letter

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A. so that's it they differ between large mid and small cap companies you'll have

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to make like Goldilocks and choose the one that's just right for you. [Goldilocks smiles at three bowls of various sizes on a table]

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