stock market Investors are scared these days. There is turmoil in the market and a major correction is being seen. Investors are suffering huge losses due to this. In such a situation, if you want good returns with less risk, multicap fund can be a better instrument for you. This is a scheme that invests in all large, mid and small cap market caps. While large-cap stocks provide protection in case of a market decline, mid-cap and small-cap stocks play an important role in generating profits. No single market capitalization can consistently outperform. Therefore, investors should invest in all market capitalizations as part of the asset allocation.
Why it is profitable to invest in multicap funds
On an annual basis, the return of Nifty 100 TRI in 2023 was 21 per cent, while the return of Nifty Midcap 150 TRI was 45 per cent. The performance of Nifty Smallcap 250 TRI has been 49%. The advantage of investing in different market capitalizations is that the risk and return are diversified across market capitalizations, rather than being concentrated in a single market capitalization. Among the four multicap funds that have given good returns in the last one year, Axis' Multicap has given the highest return at 56.02 per cent. The Kotak Multicap scheme has given a return of 52.83%, the HSBC scheme has given a return of 51.90% and the 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 large cap, mid cap and small cap companies
A well-known name in multicap is Axis Mutual Fund. This fund has consistently delivered good returns to investors since its inception. Large caps invest in large companies. Midcap captures opportunities for mid-cap companies. Smallcap invests in emerging opportunities, where small businesses have the potential to become big in the coming times. The Multicap fund invests 25 to 25 percent in large, mid, and small cap and dynamic companies. If we talk about multi-cap of Axis Mutual Fund, then it has invested maximum in financial services, automobiles and their spare parts, capital goods, healthcare, IT, real estate and consumer durables. These are all sectors that provide security to investors in all market environments and offer good returns on their investments.
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