Multicap schemes go off well at present because of the market correction and mutual fund re-categorization, said Santosh Joseph, Founder, Germinate Wealth Solution.
Multicap mutual fund schemes “make sense not only because of the market correction but also because of the mutual fund re-categorization,” stated Joseph.
Largecap mutual fund schemes would be frequently replicating the index and small- and mid-caps may be unsafe for few investors, because of the strict official orders. Therefore at present, multicap mutual fund schemes would be the best fit for investors with smaller investments, said Joseph.
Multicap MF schemes or earlier diversified equity schemes can invest its assets in stocks across market capitalization and sectors. Moreover, the fund manager in the multicap MF schemes has the liberty to switch the schemes’ asset allocations between different market caps and sectors according to his/ her outlook of the market.
Hence, the multicap schemes are comparatively less risky than a pure midcap or a smallcap fund. However, the multicap fund is riskier than the largecap schemes.
According to Deepali Sen, Founder of Srujan Financial Advisors, multicap has not emerged as a great category all of a sudden. The fact is that the category is highly suitable if you are not willing to bet on sectors and market caps by yourself or if you decide to invest in a single scheme. Sen also added that the existing market ambiguity just repeats this fact.
Several mutual fund experts are requesting investors to utilize multicap fund schemes to go into the market right at this time. These experts feel that multicap MF schemes are the “best bet for retail investors” as they offer the liberty to swing between the costly large-cap stocks and the falling small- and mid-cap stocks.
Multicap category witness 4.86 percent returns in the past one month and 9.09 percent returns in the past one year. The toppers in the multicap schemes have seen more than 21 percent returns in a period of one year, reported The Economic Times.
The post Multicap Schemes Make Sense Currently, Says Santosh Joseph appeared first on OWLT Market.
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