During the 2000-2001 market meltdown, you've been hearing that large growth funds were suffering most. You've probably also heard that some small and mid-cap funds were doing better than the big guys. Market cap refers to the worth of a company in the financial markets. You usually calculate market cap by multiplying the number of shares of stock the firm has outstanding by its current market price per share. So, the higher the stock price, the larger the market cap of a firm.
Many mutual funds invest in large cap, medium cap or small cap stocks.
Large growth firms, in particular, have suffered more than that if we look at the last year. Perhaps these firms are not benefiting as much from the wave of Federal Reserve interest rate cuts because they are already overstocked in inventory and don't really need to borrow money for capital expenditures for expansion until they reduce current inventory. Large firms tend to be slower growing than small firms and generally have less risk. Small firms are commonly more volatile than large firms. The companies are not as well established or as financially stable.