mutual fund
Stock market investors are scared these days. There is turmoil in the market and a big correction is being seen. Investors are suffering huge losses due to this. In such a situation, if you want a good return with less risk then multicap fund can be a better instrument for you. This is a scheme that invests in all market caps largecap, midcap and smallcap. While large cap shares provide protection in case of market decline, mid and small cap shares play an important role in providing profits. No single market cap can consistently outperform. Therefore investors should invest across all market caps under asset allocation.
Why investing in multicap funds is profitable
On an annual basis, the return of Nifty 100 TRI in 2023 has been 21 percent while the return of Nifty Midcap 150 TRI has been 45 percent. The return of Nifty Smallcap 250 TRI has been 49%. The advantage of investing across market caps is that risk and return are diversified across market capitalisations, rather than being concentrated in one market capitalisation. Among the four multicap funds which have given good returns in the last one year, Axis’s Multicap has given the highest return of 56.02 percent. Kotak Multicap scheme has given a return of 52.83%, HSBC scheme has given a return of 51.90% and LIC Multicap scheme has given a return of 51.37%. If someone invested Rs 1 lakh in these funds a year ago, that amount has now become Rs 1.56 lakh.
Confluence of Largecap, Midcap and Smallcap
A well-known name in multicap is Axis Mutual Fund. This fund has consistently given good returns to investors since its inception. Large cap invests in large companies. Midcap captures opportunities for midcap companies. Smallcap invests in emerging opportunities, where small companies have the potential to become big in the coming times. Multicap fund invests 25-25 percent in largecap, midcap, smallcap and dynamic. If we talk about multicap of Axis Mutual Fund, then it has invested maximum in financial services, automobile and its parts, capital goods, healthcare, IT, realty and consumer durables. These are all such sectors which provide security to investors in every market environment as well as give good returns on their investments.
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