Types of Multi-Cap Funds
Multi-cap funds can prove to be terrific wealth creators in the long term since they can take advantage of investing opportunities throughout the market. They can be categorised as :
1. Large-cap Focussed Multi-cap Funds: Such multi-cap funds allocate more than 25% of their assets to large-cap equities. These funds are useful for adding stability and balance to a portfolio, especially when markets are falling. They begin by securing the portfolio with large-cap equities and then move on to mid-cap and small-cap growth opportunities.
2. Mid-Cap Focussed Multi-cap Funds: With a more aggressive strategy and with larger exposure to mid-cap and small-cap equities, these multi-cap funds aim to generate strong returns.
3. No Specific Focus Multi-cap Funds: Apart from the mandated 25% investment in each capitalisation, these multi-cap funds do not target any specific categories. Fund managers concentrate on firms that have the potential to outperform and invest in shares across all sectors.