Investing in Mutual Funds? Want bumper returns? Here is what experts opine

Mutual Funds investment is subject to market risk and at a time when the last three months have been highly volatile, it becomes very important to select a right plan to grow one's money at the fastest rate.

According to the tax and investment experts, one should have a mix of portfolios but in the current stock market scenario, more thrust should be on large-cap and multi-cap mutual funds. Photo: Pixabay

Mutual Funds investment is subject to market risk and at a time when the last three months have been highly volatile, it becomes very important to select a right plan to grow one's money at the fastest rate. According to the tax and investment experts, one should have a mix of portfolios but in the current stock market scenario, more thrust should be on large-cap and multi-cap mutual funds. They said that for the next two to three years, Coronavirus impact is expected to continue hitting the equity mutual fund returns. So, one should rejig one's portfolio and put more money in the multi-cap and large-cap mutual funds and decrease weight in the small-cap and mid-cap mutual funds. In fact, they said that for the next two to three years, there should be no more than 20 per cent fund allocation in the small-cap and mid-cap mutual funds together.

Speaking on the safer bet for equity mutual fund investors in the next two to three years; SEBI registered tax and investment expert Manikaran Singhal said, "The way COVID-19 has hit the equity markets and its returns, there is a need for rejig of the mutual funds' portfolio. For the next two to three years, the major focus should be on the multi-cap mutual funds as it's a bunch of all kinds of mutual funds. So, the investor will get an average of the equity market returns and the risk factor involved in this multi-cap mutual fund plan will be at its lowest level."

However, another SEBI registered tax and investment expert Jitendra Solanki said that one should have an equal focus on multi-cap and large-cap mutual funds as small-cap and mid-cap funds are expected to remain tepid for the next two to three years.

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"One should make a mix of multi-cap and large-cap portfolio by allocating 40 per cent each in both types of mutual funds investment and decrease weight in small-cap and mid-cap mutual funds to not more than 20 per cent,' said Solanki.

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