Excerpted from Bogle on Mutual Funds by John C. Bogle, page 80

Market capitalization. A fund's market capitalization will indicate whether the fund emphasizes the stocks of blue-chip companies with large market capitalizations, emerging companies with small capitalizations, or something in between. You should now the difference. The average weighted market capitalization of the common stocks owned by equity funds may range from more than $15 billion to less than $500 million. An average market capitalization in the range of $5 billion to $8 billion is typical for a mainstream stock fund. There is no right or wrong average market capitalization. It is simply a good measure of a fund's investment emphasis and, to some degree, the risks that it assumes. Over the long term, surprises, while they occur in all types of stocks, are less likely among the large blue-chip issues. (However, surprises among the blue chips have been rife in the early 1990s.)