Equity investment at times can be a daunting task. It may confuse new investors and even experienced ones, with the number of options available. Multicap funds as a category helps in providing diversification across large cap, mid cap and small cap funds.

Let’s understand the multicap fund.

Multicap fund is a fund that invests at least 25% of its portfolio, each in small-cap, mid-cap, and large-cap stocks and it requires to invest at least 75% in equities, overall.

This also helps the investors with the solution to three basic issues.

Unsure about where to start?

Many equity investors want to start investing, but they end up delaying. Not knowing where and how to invest is one of the few reasons for the delay.

Investing in equities can be a bit confusing at times because it is quite a learning curve. Although there are a few content pieces and various resources to learn from on the internet, they aren’t organized and it can take a lot of time for new investors to understand investing.

While investors learn how to invest, investing in a multicap fund may be a potentially good option for the beginners as it helps by providing exposure to a wide range of equity stocks of different sizes with professional expertise. A multicap fund provides diversification and a balanced allocation to different market caps, which can potentially suit the needs of new investors.

Lack of Diversification?

There is always a concentration risk which is feared. It refers to a potentially increased risk when an investor invests too much in similar companies or in the same sector.

In such a scenario, it may be prudent to properly diversify your equity investments against concentration risk. This means there is a need of investing in multiple sectors and market caps.

That’s where a multicap fund comes in. These funds invest in all three kinds of companies based on size. They invest in small cap and mid cap stocks that offer growth potential as well as large-cap stocks that are less volatile and more established companies. This helps give exposure to a wide array of companies with a single fund and allows easy diversification.

Worried About Missing Out?

Various investors look to invest in many stocks in order to capture the entire market spectrum. A multicap fund has a unique approach to capturing diversity. It invests in companies of different sizes aiming to capture potential capital appreciation.

These stocks are picked from various sectors. This means investors get access to the entire market spectrum with multi cap funds.

Wrapping Up

Overall, a Socha Samjha Nivesh in a multicap fund can potentially be a positive choice for investors, those who are looking for a fund that caters to diverse needs.

This is an investor education and awareness initiative by Axis Mutual Fund.

Investors have to complete one-time KYC process. Visit www.axismf.com or contact us on [email protected] for more information.

Investors should deal only with Registered MFs, details of which are available on www.sebi.gov.in – Intermediaries/ Market Infrastructure Institutions section.

For any grievance redressal, investors can call us on 1800 221 322 or write us at [email protected] or register complaint on SEBI Scores portal at http://scores.gov.in.

Investors are requested to consult their financial, tax and other advisors before taking any investment decision(s).

Market caps are defined as per SEBI regulations as below: a. Large Cap: 1st -100th company in terms of full market capitalization. b. Mid cap: 101st -250th company in terms of full market capitalization. c. Small Cap: 251st company onwards in terms of full market capitalization.

Statutory Details: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd. (liability restricted to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the AMC). Risk Factors: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme. No representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The AMC reserves the right to make modifications and alterations to this statement as may be required from time to time.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.