If you are a budding investor, who carries big dreams and the ability to shoulder bigger responsibilities in the future, then this asset class is for you. The advantages of investing in a multi cap mutual fund are many:
Firstly, it offers a diversified investment approach for investors, who are looking to grow big with their investments and also are not quite risk averse.
Secondly, these investments work best in all market conditions, bullish or bearish. If one chunk of the multi fund does not perform well, you are benefited from the stability of the other chunk.
Thirdly, it provides you as an investor with a blend of growth and value investment options.
The average portfolio turnover of the multi-cap funds is 79%, while that of large-cap and mid- and small-cap funds are 73% and 64%, respectively. Portfolio turnover is a measure of how frequently assets were bought and sold in a fund by the manager during the course of a year. Since, these are not paid by the fund manager, or by you directly, it will be imposed on you as the investor, by ripping off a part of your returns. In the short run this practice might not seem as matter of concern, but in the long run can create an impact on your total returns.
Apart from these funds, it is very important to approach a dynamic fund manager. Depending on his ability, you will be benefited more or less, as to how he chooses to invest your funds. You fund manager plays a crucial role as to what portion of your savings needs to be invested in what stocks and how the market conditions might be in the near future.
If you do not have a fund manager who will be able to benefit you from the requisites above, you will be on the risk of losing out on your savings and enter into a debt of a loan or a personal loan, to finance your borrowings or to finance your financial requirements.
So, choosing a proper fund manager, who can guide you through investment procedures under various market conditions’ is of primary importance.