Large Cap, Mid Cap and Small Cap Funds
The “Explore” option for Mutual Funds is now live on the FIKAA app! Investors can go through ALL the Mutual Funds available in the market and choose the ones they wish to invest in. To make the selection a bit more efficient and to assist the process we have also created 6 categories based on the capitalisation, returns or tax savings.
Now let us learn more about the first 3 options – Large cap funds, Mid cap funds and Small cap funds. And which one suits us better! We have clubbed them together since they are based on the market cap or capitalisation of the companies invested in by the Mutual Fund.
Large Cap Mutual Fund
These are Equity funds that invest at least 80% of their corpus in the top 100 companies of India in terms of their market capitalisation. These ranks are determined by SEBI – Securities and Exchange Board of India, thus they have an impeccable reputation. Large cap companies are household names and have immense customer loyalty. Which translates into the Large cap funds being safer investment options, providing stable returns. They are ideal for goals of 5 year period or more.
Mid Cap Mutual Fund
As the name suggests, Mid Cap funds invest in mid-sized companies. These are companies that are in their growth phase and hence are more volatile than the large cap companies. On the other hand, these funds are more stable but possibly have lower returns than small cap funds. Hence, they are the best option if one chooses a fund taking into account the risk, returns and the sector. These investments should be planned for a longer period, around 7-10 years, for best returns.
Small Cap Funds
Small cap funds invest in equity of small cap companies (market cap of 5,000 crores or less) . These mutual funds invest at least 65% of their corpus in small sized companies. As these are companies in their starting phase they are generally said to have high risk and high returns. For this reason Small cap funds are said to boost the growth potential of a portfolio. With some diversification and judicious SIPs, small cap funds are a great way to participate in the growth spurt of an industry.In summary, with the FIKAA app's comprehensive Mutual Fund exploration feature, you're equipped to navigate the nuances of Large Cap, Mid Cap, and Small Cap funds. Whether you prioritize stability, growth potential, or agility in your investments, FIKAA offers the tools to align your choices with your financial objectives. So, embark on your investment journey today with FIKAA, and pave your path to financial freedom!
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