While many know the value attached to mutual fund investing, sometimes new funds and schemes can create huge confusion, especially in the minds of novice investors. In case you are already into equity and debt funds, it is now time to diversify your investment portfolio with agile funds as per your requirements and fund returns. For this, you must opt for multi cap mutual funds.
What are multi cap funds?
Multi cap funds are a kind of mutual fund that invests majorly in multi cap companies that can belong to any of the kinds – may it be a small cap, mid cap, and large cap companies. This feature distinguishes multi cap funds from other mutual funds as the fund manager has the choice to disseminate the wealth throughout 3 firm types like large, small, and mid-caps instead of just being restricted to one group of companies.
Many of the other mutual funds are restricted to just investing in one kind of firm because of its market capitalization. For instance, large cap funds can just invest in firms with the biggest market capitalization. But in case of any investment opportunity comes up in a mid cap or small cap vertical, fund managers cannot invest the money in such firms. Multi cap fundsaddresses this problem and endow the fund manager with full freedom to invest in any kind of opportunity, irrespective of the company size.
Different kinds of multi cap funds
While multi cap funds can be used for investing in rising sectors or firms, few schemes adopt specific guidelines, which make it simpler for you to understand how your investment can be diversified.
Large cap focused: For a long time, multi cap funds are focused on investing in large cap firms owing to their better record and as it is a safe avenue. It is an approach that few multi cap mutual funds still follow. Thus, if you believe in India’s top companies like TCS or Reliance, you can look at this fund type that puts in a huge investment chunk in such firms.
Small and mid-cap focused: If you are open to investing in companies with a minute portion in large cap firms to cushion certain headwinds, then you can opt for this type.
Market mover: This fund type remains true to its original idea of multi cap funds with fund managers moving your investment where the higher profit may be found. Select this fund type based upon your risk tolerance and a particular fund’s record.
Which multi cap mutual fundyou must consider?
If you want to invest in multi cap mutual funds, then you may consider opting for Axis Multi cap fund. Fund managers of this fund are Sachin Jain and Anupam Tiwari. They come with a combined experience of around 24 years.
Axis multi cap fund basically tracks Nifty 500 multi cap stocks for investment. The fund invests a minimum of 25 percent in large, mid, and small cap stocks with the remaining 25 percent allocated dynamically according to the market trends. Thus, Axis multi cap fund is a good option if you are seeking long term wealth generation and have a high-risk tolerance level.