Why You Should Invest in Multi-Cap Scheme

Investing in mutual funds is an inclusive decision, where mutual fund advisors and managers manage your fund options so that optimum returns can be generated. There are a lot of options where you or your fund manager can chose to place the funds so that sufficient returns can be generated over a period of time. These options come in the form of equity, or debt or mixed fund options. When the mode of investment is stock, generally there are three types of stock fund options. These are:

1. Large cap stocks:

   These are the stocks that are listed by the top corporate companies and offer a low-risk and high-credibility option. The main benefit of investing in such stocks is that the returns are guaranteed and the invested funds are rather safe. This is because the companies are renowned and there is no risk of any of market-based fluctuations associated with these stocks. However, the limitation is that the returns may not be as high as desired.

2. Mid-cap stocks:

   These are the stocks that are listed by tier-2 or one-ladder below companies. These stock values are not as high as that of large-cap ones and are not as low as that of small-cap ones. These stocks offer better growth rates than large-cap stocks and the risk-factor is also a bit higher.

3. Small-cap stocks:

   These are the stocks that are listed by small or new companies. The risk-factor associated with investment in small-cap funds is quite high. However, the projected returns are also higher than either large-cap or mid-cap stocks.

Given this broad classification, it becomes easier for us to understand the option that will enable an optimum returns on investment. This is the option of investing in multi-cap stock funds. Multi-cap stocks fund options imply investment in multiple stocks across the valuation figures. In any investment method, flexibility is the key and often decides the actual returns that will be garnered through it. This flexibility is represented by the multi-cap investment option as through this option, the fund manager allocates specific funds to large, mid and small cap options. This way, the funds are allocated in a balanced manner and consequently, the returns generated are also optimum.

HDFC Life offers saving and investment options that are aimed at securing your financial reserves and making your funds grow. For details, click on the mentioned link: https://www.hdfclife.com/savings-plans .

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