INSUBCONTINENT EXCLUSIVE:
By DK AggarwalWhen it comes to investing, the prime rule to follow is to not put all your eggs in one basket
The rule applies not only equity, but also mutual funds
Before one invests, there is always a dilemma with regard to the category of mutual funds one should invest in.
Currently, mutual funds
appear to be the most preferred choice among investors and it is evident from the fact that the number of folio has increase considerably in
Actually, healthy returns compared with traditional tools of investment have attracted investors towards mutual funds.
In the current stock
market, the remaining part of 2018 will be a period when bottom-up stock picking will trump top-down and sector-based investing
In such an environment, multi-cap funds, which enjoy a lot of scope, would be a good bet for retail investors given the flexibility they
It would be not wrong to say the performance of multi-cap funds depends on the wisdom of the fund manager and the processes followed by the
Multicap funds begin with an allocation towards each category and then go about picking stocks within each category
To note, largecap funds provide better stability to your portfolio, while midcap and smallcap funds provide exceptionally high returns
Multicap funds can help design and maintain a limited mutual fund portfolio, if investors do not want to take exposure to too many
funds.
For sensible diversification, two or three multi-cap funds are good enough to enjoy all the benefits that equity provides
As the long-term outlook for the Indian economy is strong, the stock market is poised to move higher and multi-cap funds are would be better
placed to tap these opportunities.
The bottom line is that for most ordinary investors seeking diversification with simplicity, multicap is
Multicap funds are not a homogenous lot in terms of risk, but one cannot deny the risk, as both midcap and smallcap funds are two of the
riskiest classes contained in multicap funds.
To offset such risks, investors should invest periodically across a lengthy duration
An SIP method is an easier way to build wealth over the long term
Through SIP, one can accumulate wealth and benefit from rupee cost averaging across a very long term.
