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How to diversify your investment portfolio effectively | Multi cap VS Flexi-cap funds

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Value Research

What is the best approach to effectively diversify your mutual fund investments — multicaps, flexicaps, or large and midcap funds? Watch this episode of Investors' Hangout to dive deep into each of these categories, helping you tailor an investment strategy that fits your financial goals.
Whether you're a seasoned investor or just starting, this discussion will guide you through tailoring a diversified investment approach to maximise your returns while managing risk.

Be it queries related to mutual funds, stocks, or taxsaving investments, Value Research https://www.valueresearchonline.com'>https://www.valueresearchonline.com will answer all of them. Feel free to post your query on https://vro.in/askvr.'>https://vro.in/askvr.

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Here are the key takeaways:
Begin investing in a flexicap fund for diversification while being conservative.
For investors with risk tolerance, one multicap fund suffices for investments up to ₹25,000. Invest in additional multicap funds at ₹5 lakh and ₹25 lakh thresholds.
Flexicap managers invest freely, while multicap managers must allocate 25% to each cap size, boosting longterm returns with mid and smallcap allocation.
To optimise returns, most investors should graduate from investing in a flexi cap to a multi cap.
If you are familiar with the equity market's volatility, consider investing directly in large, mid, and small caps.
Invest in up to 5 funds for diversification without the costs of managing an indexlike portfolio

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Chapters:
00:04 Introduction
00:26 What did Markovitz mean when he said diversification is the only free lunch in investing?
02:17 What is diversification in the context of mutual funds?
05:16 How do multi cap, flexi cap, and large and midcap funds compare in terms of their investment mandates, risks and benefits?
09:02 Which of these categories will be suitable for what kind of investor profile?
10:18 How many funds can get you optimum diversification?
12:14 Why should you have geographical diversification?
12:52 Viewer's question: I invest in mutual funds recommended by Value Research only for my retirement.
In that context, what benefits does investing in active equity funds recommended by Value Research has over investing just in NPS TierII, which seems to have better taxation and fund management charges?
14:23 Key Takeaways

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