Confusion in Choosing a Mutual Fund? Friends, it’s not just newcomers, but even experienced investors find themselves in a dilemma about which mutual fund to invest in—Large Cap, Mid Cap, or Small Cap? But fret not, we’ll tell you about a mutual fund where you’ll get the qualities of all three namely Large Cap, Mid Cap, and Small Cap in a single fund.
Which Fund is it? What it is Called?
This fund is called a Flexi Cap Mutual Fund. As the name suggests, it offers considerable flexibility. This means that the fund manager has the flexibility to invest in Large Cap, Mid Cap, and Small Cap segments in any proportion, keeping an eye on the market and investing the money accordingly.
Benefits of Flexi Cap Mutual Fund
The biggest advantage of investing in a Flexi Cap fund is that it diversifies risk. Large Cap provides stability and moderates risk, Mid Cap entails slightly more risk compared to Large Cap but offers higher returns, and Small Cap presents the opportunity for higher returns but also carries the highest risk.
However, when you invest only in Large Cap, the returns are not as high because the risk is the lowest. Investing in Mid Cap yields higher returns but also increases the risk. Small Cap investments carry significantly higher risk but offer potentially higher returns.
So, if you want a balance of these three without taking excessive risk, then Flexi Cap is the best option.
Also read: 3 Mutual Funds which Give Stability of Debt Fund and Growth of Equity
How to Select a Flexi Cap Mutual Fund?
There are several Flexi Cap MFs in the market, and you can choose based on ratings or past performance. Additionally, you can also consider the mutual fund’s expense ratio and exit load.
Recently, we invested in JM Flexicap Fund Direct Growth. We chose this fund because it has a 5-star rating, an expense ratio of 0.59%, and an exit load of 1% if you withdraw your money before 30 days. But you can choose any flexi mutual fund as long as it has good credibility.
How Can You Invest in Flexi Cap Mutual Fund?
You can either make a Lump Sum investment or start a monthly SIP. To invest, you can use the direct website of the chosen fund or use discount brokers such as Groww, Upstock, INDmoney, ET Money, or Zerodha app.
