Balwan Singh Sambyal
Investors should consider investments which offer risk-adjusted returns. If risk management, a key to successful investment, is well taken care of in the portfolio, the only outcome is long-term wealth creation. Diversification and asset allocation strategies play a vital role in risk mitigation and thus are helpful in keeping wealth creation journey on track.
Equity has an established history of generating significant wealth in the long run. For those who can’t track stocks on a regular basis but desire to benefit from growth equity offers, investment through equity mutual funds is the best way to create goal-oriented wealth.
Large & Mid Cap Fund, one of the categories in the equity mutual fund segment, are capable of offering long-term financial solutions. These are open-ended schemes which invest in companies with large market capitalisation and those which are second in the ladder – the mid-sized companies.
Generally, investors go for large cap funds for stable returns. But it is equally true that seeking excessive stability in the portfolio often leads to missing out on the other growth opportunities present in the market. Large & Mid Cap funds with exposure to mid-cap stocks, which are comparatively riskier than large caps, tend to add the extra boost to your portfolio over the long run.
Since mid-caps are in the process of becoming large caps in years to come, the growth propositions are higher and so is the value creation. It is prudent to invest in such stocks early and be a part of their growth stories. This is very the large & midcap fund becomes very relevant.
Such a scheme allocates a minimum of 35% each in large cap and mid cap. Thus investors have a relatively stable portfolio due to exposure to large caps along with a growth-oriented strategy with allocation to midcaps. ICICI Prudential Large & Mid Cap Fund is one of the steady performers across market cycles, in this category. Investors who seek long-term growth potential and have an investment horizon of 5 years and above may consider this category scheme.
(The writer is Mutual Fund Distributor, J&K).
