DelhiDesk Building a mutual fund (MF) portfolio can be challenging, as various people have different views on how to construct an MF portfolio and allocate money to each section. The allocation will vary for investors with different risk profiles based on the characteristics of firms with different market caps and their risk-return profiles. There are three major categories of mutual funds: large-cap, mid-cap, and small-cap funds. SEBI registered tax and investment experts suggest having a mix of all three, with 30% in large cap, 30% in flexi cap, 20% in mid-cap, and 20% in small-cap funds. The choice of schemes can be decided based on the objective of investments, investment horizon, and risk appetite of investors. Investors should diversify their investments across market caps, and those with long investment horizons and higher risk appetite can consider some allocation in small caps. Conservative investors should have a complete equity allocation in large-cap stocks, while balanced and aggressive investors should consider having some exposure to mid-cap and small-cap stocks.
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Here is the news bullets sorted by DelhiBreakings.com team.
– Building a mutual fund (MF) portfolio can be tricky
– Allocation will differ for investors with different risk profiles
– Three major categories of mutual funds: large-cap, mid-cap, and small-cap
– Large cap funds are considered safer, small-cap funds carry higher risk
– Midcaps are good for portfolio diversification with high growth potential and risk
– Suggested allocation: 30% large cap, 20% mid-cap, 20% small cap, and 30% flexi cap
– Choice of schemes depends on investment objective, horizon, and risk appetite
– Diversify investments across market caps
– Conservative investors should focus on large-cap stocks
– Balanced investors can have some exposure to small-cap stocks
– Aggressive investors can allocate 50-60% to large-cap, 15-25% to mid-cap, and 15-25% to small-cap stocks
– Use a mix of large-cap, mid-cap, flexi-cap, and small-cap funds in the portfolio.
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