Ch.10 · Risk Measures and Ratios · medium
What is 'weighted average market capitalisation' of a mutual fund portfolio?
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EXPLANATION
Weighted average market cap is the sum of each stock's market cap multiplied by its portfolio weight. It indicates the fund's size bias — a fund with ₹2 lakh crore weighted average market cap is clearly large-cap oriented. Investors can use this to assess whether a multi-cap or flexi-cap fund is genuinely diversified or concentrated in large caps.
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