When should I invest in multicap?

If your investment objective is wealth creation over the long-term and you have a moderate risk tolerance, then you might want to consider investing in Multi-Cap Mutual Funds. These schemes offer a diversified approach to investing in the equity markets and endeavor to make the best of every investment opportunity.

What will happen to multi cap funds?

What happened? Sebi on September 11, came out with a new circular to restructure multi cap funds. As per the circular, multi cap funds need to have a minimum 25\% in large cap stocks, 25\% in mid cap stocks, and 25\% in small cap stocks by January 2021. The remaining 25\% can be as per the fund manager’s choice.

Why should we invest in mid cap funds?

Midcap funds seek long term growth opportunities for investors. By investing in mid cap funds, investors may enjoy the following benefits as well: Diversification: Investment spread across several mid cap stocks and sectors, which makes equity funds moderately risky than direct investment.

Is multicap fund good?

Risk: Top multicap mutual funds have a diversified portfolio. Hence the risk in these funds is moderate. They are more risky than pure large cap funds but less risky than pure mid cap and small cap funds. In market lows, the fund plays safe.

Are midcap funds risky?

Mutual funds that invest in these stocks, called midcap mutual funds, obviously are vulnerable to the same risks. And while they are known to have outperformed large-cap funds in a bull market, they also take a beating during bear cycles; this is because they experience much higher volatility than large caps.

Is Multicap fund good for long term?

Therefore, in the long run, multi-cap funds are usually better wealth creators than other categories of funds as they can take advantage of investment opportunities across the market. Further, returns from the multi-cap category are comparable to mid-cap category over the long term which comes with lesser volatility.