A large-cap mutual fund works by investing in companies that have a larger market capitalization. These funds are known to offer consistent returns in the market. The companies that large-cap mutual funds invest in are generally leaders in their business field, and hence, they are expected to remain more stable in comparison to small-cap or mid-cap companies, especially when the markets are more volatile than usual. Additionally, a large-cap mutual fund also has a good track record in the market, as it is backed by healthy corporate governance practices.

When it comes to the kind of investor that should consider these funds, it is generally conservative investors that are most suited to them. The reason for this is that the underlying companies are not affected that much by market movements. Hence, the funds themselves are less volatile than mid-cap or small-cap investment funds. Additionally, investing in large-cap funds is also suitable for those who wish to increase their portfolio's diversification with stocks from leading companies across different market sectors. In the scenario where one sector might fail to meet these expectations, another can be helpful in reducing adverse effects on one’s portfolio.