While Large Cap funds offer stability, Mid Cap funds offer Velocity. They represent the sweet spot in the investment world—companies that are past the risky start-up phase but still have a long runway of growth ahead of them.
These funds invest in the "underdogs" of the stock market—companies that are small today but have the potential to become the market leaders of tomorrow. However, hunting for these hidden gems comes with high risk.
Dividend Yield Mutual Funds work on the same principle. They invest in companies that share their profits with shareholders regularly. This gives you two engines of wealth creation: Stock Price Growth + Regular Cash Payouts.
Most mutual funds have rigid rules: Large Cap funds must invest in big companies; Small Cap funds must invest in small ones. But markets are dynamic. Sometimes big companies perform better, sometimes small ones do.
Usually, people rush to buy traditional insurance policies or lock their money in 15-year Public Provident Funds (PPF) just to save tax under Section 80C. While these options save tax, they often offer low returns that barely beat inflation.
While most investors chase "hot" stocks that are already expensive (like buying a jacket at full price), Value Funds look for quality stocks that the market has ignored or undervalued (buying that same jacket at a discount).
Contra Mutual Funds are designed for this exact strategy. They bet against the current market sentiment to find hidden opportunities that the "crowd" is ignoring.
In this guide, we’ll break down what these funds are, how they work, their pros and cons, and who should consider investing in them. Plus, we’ll show you how modern tools make managing such investments simpler than ever.
It makes sense. If you buy 50-60 stocks, the risk is spread out. But there is a downside—over-diversification. If you own too many average companies, your "winners" get diluted by the "losers," and your returns end up being... just average.
Let's break down the name. "Multi" means many, and "Cap" refers to market capitalization (a company's size). A Multi Cap Fund is an equity mutual fund mandated to invest across companies of all sizes. According to current SEBI regulations, these funds must invest a minimum of: