I have 5 multi-cap funds with me. However, in one of your Money Hangouts session you suggested ? of one's portfolio should be in large cap, So, can I survive with 5 multicap funds? Also, some places tag Kotak Select Focus Fund as large cap. So, what is it, large cap or multi cap?
- Sanjeev, Delhi
Transcript: I am not sure what others are claiming but we classify funds based on the underlying assets of a fund and consider the equity and debt proportion. Based on this criterion, Kotak Select Focus has 60% of the portfolio in large cap and remaining 40 percent in mid and small cap funds. Hence, this fund is categorised as a multi cap fund.
Generally, I advise investors to keep a major portion of their portfolios in large cap and the rest in mid and small cap. Now, this diversification can be achieved by investing in multi cap funds. If you choose the large cap, mid cap and small cap funds all by yourself, it takes a lot of effort like rebalancing and reshuffling the portfolio. The onus is on you to rebalance the portfolio. Whereas, with multi cap, it becomes convenient with the required diversified and simplicity.
This article was originally published on May 02, 2017.
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