Why include large-cap in a portfolio?
Large capitalization stocks provide exposure to an expansive and important segment of the Canada equity universe. It is generally accepted that stocks with larger capitalizations are more stable and more likely to pay dividends, due to the nature of the established underlying business. Due to being traditionally less growth oriented and having a more stable share price, large-cap stocks usually offset their stock price appreciation by paying higher dividends, which is often attractive to investors seeking income.
Portfolio applications for large-cap
Strategic allocations to large-cap Canadian as well as to U.S. equities are common, and there is a broad range of large-cap equity investment products available in the marketplace, both actively managed and index-based.
Investors may also choose to make tactical allocations to large-cap, depending on whether their market/economic views favour the asset class or not.
Large-cap ETFs can offer efficient, low-cost core large-cap equity exposure with transparency and trading flexibility, making them ideal for both strategic and tactical uses.