New Delhi, Nov. 4 -- Equity mutual funds are classified into different categories based on their investments across market capitalisations, primarily large-cap, mid-cap, and small-cap funds.

Large-cap funds invest in well-established companies that tend to be relatively less volatile, while mid-cap funds focus on medium-sized companies. Small-cap funds, on the other hand, invest in smaller companies, which carry higher risks but also offer greater growth potential.

As per SEBI's categorisation norms, large-cap funds must invest at least 80% of their assets in large-cap stocks. Mid-cap and small-cap funds must invest at least 65% of their assets in their respective categories.

Over the last one year, the large-cap fund category declined...