Best Multicap Mutual Funds to Invest in 2021
If you are looking to invest in mutual funds that offer diversification across different market capitalizations, then multicap funds could be a great option for you. Multicap mutual funds invest across large-cap, mid-cap, and small-cap stocks, providing investors with exposure to different segments of the market. Here are some of the best multicap mutual funds to invest in 2021:
- Axis Multicap Fund
The Axis Multicap Fund is a popular choice among investors due to its well-diversified portfolio and strong track record. The fund has a mix of large-cap, mid-cap, and small-cap stocks, which helps to balance risk and returns. The fund has consistently outperformed its benchmark over the years and has delivered impressive returns to investors.
- Mirae Asset India Equity Fund
The Mirae Asset India Equity Fund is another top-performing multicap mutual fund that has consistently delivered strong returns to investors. The fund invests in quality stocks across market capitalizations and has a well-diversified portfolio. The fund has a proven track record of outperforming its benchmark, making it an attractive investment option.
- Kotak Standard Multicap Fund
The Kotak Standard Multicap Fund is a well-known name in the Indian mutual fund industry and is one of the best-performing multicap funds. The fund has a mix of large-cap, mid-cap, and small-cap stocks, which provides a good balance of risk and returns. The fund has consistently outperformed its benchmark and has delivered impressive returns to investors over the years.
- ICICI Prudential Multicap Fund
The ICICI Prudential Multicap Fund is another popular choice among investors due to its well-diversified portfolio and strong track record. The fund invests across market capitalizations and has a mix of quality stocks in its portfolio. The fund has consistently outperformed its benchmark over the years, making it an attractive investment option for investors.
- SBI Magnum Multicap Fund
The SBI Magnum Multicap Fund is a multicap mutual fund that has delivered strong returns to investors over the years. The fund invests across large-cap, mid-cap, and small-cap stocks and has a well-diversified portfolio. The fund has consistently outperformed its benchmark and has a proven track record of delivering impressive returns to investors.
What are Multicap Mutual Funds?
Multicap mutual funds are a type of mutual fund that invests across companies of different market capitalizations, including large-cap, mid-cap, and small-cap companies. These funds provide a diversified portfolio that spreads the investment across various market segments. The fund managers allocate the investment in different stocks based on their investment strategy and market outlook. As a result, multicap mutual funds provide a balance between the growth potential of mid-cap and small-cap stocks and the stability of large-cap stocks.
Why Invest in Multicap Mutual Funds?
Investing in multicap mutual funds can be beneficial for investors who seek to have exposure to different market segments, but do not want to invest in multiple mutual funds. The advantage of multicap funds is that they offer diversification, which helps to reduce risk. Additionally, since the fund managers can choose stocks from different market segments, they have the flexibility to allocate the funds based on their market outlook. This allows the fund managers to take advantage of opportunities in different market segments, which can result in higher returns.
Things to Consider before Investing in Multicap Mutual Funds
Before investing in multicap mutual funds, investors should consider several factors, such as the fund’s track record, investment strategy, and expense ratio. Here are some of the things investors should consider:
- Performance History: It is important to check the performance history of the fund and compare it with its benchmark. A fund that consistently outperforms its benchmark can be a good investment option.
- Investment Strategy: Investors should understand the investment strategy of the fund and whether it aligns with their investment objectives. Some funds may have a growth-oriented strategy, while others may focus on value or income.
- Expense Ratio: The expense ratio is the fee charged by the mutual fund to manage the investments. Investors should compare the expense ratio of different funds and choose the one with a lower expense ratio, as it can have a significant impact on returns over the long term.
- Fund Manager: The fund manager’s experience and track record are important factors to consider when investing in a mutual fund. Investors should check the fund manager’s performance history and investment style.
Conclusion
Multicap mutual funds are a good investment option for investors who want to have exposure to different market segments. These funds offer diversification, which helps to reduce risk, and the potential for higher returns. However, investors should consider several factors before investing in multicap mutual funds, such as the fund’s performance history, investment strategy, expense ratio, and fund manager’s experience.
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Frequently Asked Questions (FAQs)
What are multicap mutual funds?
Multicap mutual funds are mutual funds that invest across companies of different market capitalizations, including large-cap, mid-cap, and small-cap companies.
What are the benefits of investing in multicap mutual funds?
The benefits of investing in multicap mutual funds are diversification, potential for higher returns, and exposure to different market segments.
How do multicap mutual funds differ from other mutual funds?
Multicap mutual funds differ from other mutual funds because they invest in companies of different market capitalizations, while other mutual funds may focus on specific market segments.
What is the investment strategy of multicap mutual funds?
The investment strategy of multicap mutual funds is to allocate the investment across different market segments based on the fund manager’s market outlook and investment strategy.
What are the risks associated with investing in multicap mutual funds?
The risks associated with investing in multicap mutual funds are market risk, sector risk, and stock-specific risk.
How do I choose the best multicap mutual fund?
To choose the best multicap mutual fund, investors should consider the fund’s performance history, investment strategy, expense ratio, and fund manager’s experience.
What is the ideal investment horizon for multicap mutual funds?
The ideal investment horizon for multicap mutual funds is long-term, as these funds invest in stocks of different market capitalizations.
Can I invest in multicap mutual funds through a Systematic Investment Plan (SIP)?
Yes, investors can invest in multicap mutual funds through a Systematic Investment Plan (SIP), which allows them to invest a fixed amount at regular intervals.
What are the tax implications of investing in multicap mutual funds?
The tax implications of investing in multicap mutual funds are similar to other equity mutual funds. Investors have to pay short-term capital gains tax if they sell the units within one year of investment and long-term capital gains tax if they sell after one year.
Can I switch from one multicap mutual fund to another?
Yes, investors can switch from one multicap mutual fund to another if they find a better investment option. However, they may have to pay exit loads and capital gains tax if they sell the units before completing the minimum investment horizon.
