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Multi Cap Mutual Funds have always been in the limelight because of the unique investment style these schemes follow. The flexibility to invest in stocks from different market capitalization and the ability to show stability even during the toughest market conditions make this category a favorite of mutual fund investors. During the year 2018, when a large number of equity mutual funds were not performing well, these schemes showed a comparatively lower downfall than the other equity schemes.
In 2019, the multi cap category is expected to show good growth. Let’s take a look at major factors which make this scheme a perfect pick this year.
1. High Allocation in Large & Mid Caps
After a not so good 2018, market experts are expecting the stocks from large cap and mid cap space to show good growth in 2019. Now, if you will look at the portfolio average of the multi cap category, a good allocation can be seen in the large cap (68.13%) as well as the mid cap space (23.50%). This allocation will help the scheme in taking growth from both the spaces in the long term. In addition to this, the scheme also has around 10.14% allocation in the small cap space, which will also work as a growth factor for the scheme.
2. Volatility Management Capability
Over the years, multi cap mutual funds have shown great stability during the volatile market conditions by handling the downtrends considerably well. Now, in the year 2019, several factors such as General Elections, rising crude oil prices, US-China trade war, etc, have affected the equity market and in the future too, some volatile sessions can be observed due to various factors. But, multi cap funds will be able to help you in downsizing the effect of the volatility, and all the credit goes to the investment style followed by the schemes from this category.
3. Managed Risk
The risk of the schemes from this category is comparatively lower and in a range of moderate to moderately high. This makes these funds a suitable option for most type of investors. Multi cap schemes are a perfect choice for new investors who want to enter the world of mutual funds in 2019 and also a great choice for people who are looking to reduce the risk factor and to increase the growth opportunities in their portfolio.
How to Choose a Suitable Multicap Fund?
Now, even though multi cap funds are full of opportunities and have a moderate level of risk associated with them, these schemes are not suitable for everyone. Being from the equity category, multi cap funds can show negativity in returns, which is although low but is enough to create panic among low risk investors. So, if you are planning the investments, make sure you have the ability to handle risk. Also, make sure that you are choosing the multi cap fund for long term goals of 5 years or more, as this is the optimal time frame for the scheme to generate returns.
Reading so far, you must have known the factors that make multi cap funds a great choice in the year 2019, and if these are the right choice for you or not. Now, all you have to do is select the right scheme, which you can do from the recommended fund page of MySIPonline. In case if you face problem during the selection, you can connect with the experts @ 9660032889.
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