Feeling Worried, Confused, but also Eager to Invest? Multicap Funds can be an option

Investing in equities can be confusing. It can often overwhelm new investors and even seasoned ones, with the number of options available. A fund category that may help simplify decision-making for beginner, worried, or confused equity investors can be multicap funds.

Let’s deep dive and understand what a multicap fund is.

A multicap fund is a fund that invests minimum 25% of its portfolio, each in small-cap, mid-cap, and large-cap stocks. It needs to invest at least 75% in equities, overall.

But how does this help investors? It works to solve three fundamental issues that investors face.

Confused Where to Start?
Many equity investors want to start investing, but they end up procrastinating. What is the reason for the lack of decision making? They don’t know where or how to start investing.

And rightly so. Investing in equities can be tricky because it is quite a learning curve. Even though there is so much information about investing available online, it is not organized and it can take a lot of time for new investors to understand investing. Combined with these roadblocks is the high risk factor that comes with stocks.

While investors gain knowledge on how to invest, investing in multicap funds may be a wise option for beginners as it provides exposure to a wide range of stocks of different sizes with professional expertise. A multicap fund provides a balanced and a diversified approach to different market caps, which may suit the needs of the investors.

Lack of Diversification bothering you?
Equity investors at times worry about concentration risk. Concentration risk refers to increased potential risk when an investor invests too much in similar companies or in the same sector. In this case, if most companies of a single type face an adverse event, the investor is more likely to face losses.

In such a scenario, it may be prudent to properly diversify equity investments against potential concentration risks. That’s where a multicap fund comes in as these funds invest in all three market capitalizations.

Worried About the fear of missing out?
Some equity investors look to invest in various stocks representing the entire market potential. A multicap fund has a unique approach to capturing diversity. It invests in companies of all sizes aiming to capture potential upside while managing risk. These stocks are chosen from different sectors, giving investors an access to the entire market with multicap funds.

Wrapping Up
Multicap funds can be an option for a Socha Samjha Nivesh trying to help investors looking for a fund that caters to different needs. It provides a way for investors to enter the markets and also diversify their investments
To learn more about the multicap fund, download the Axis MF investment app.

Large Cap:1st-100th company in terms of full market capitalization.
Mid Cap:101st-250th company in terms of full market capitalization.
Small Cap:251st company onwards in terms of full market capitalization

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

Investors have to complete one-time KYC process. Visit https://web-cug.axismf.com or contact us on customerservice@axismf.com 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.

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

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.