Mutual Fund investment: Which equity option will fetch more capital gains for you in 2020; Check what expert says

Mutual Fund investment: This is an opportune time for mutual fund investors to create wealth as mid-cap stocks are trading at hefty valuation.

Mutual Fund investment: Small-cap shares are also expected to outperform large-cap stocks because they are also trading at hefty valuation. Photo: Reuters

Mutual Fund investment: At a time when the stock market is volatile and after the geopolitical tension taking their toll on the Indian indices, mutual funds have once again started to attract eyeballs from investors. According to the investment experts, the coming few months are good for equity mutual fund investments. However, in equity mutual funds, there are various categories like large-cap, mid-cap, small-cap and multi-cap mutual funds.

Speaking on the mutual funds categories that will fetch more return on investment Feroz Aziz, Deputy CEO at Anand Rathi Wealth Management said, "This is an opportune time for mutual fund investors for wealth creation as mid-cap stocks are trading at maximum valuation. In the coming few months, they are expected to outperform large-cap shares at various indices. So, if we compare the returns expected from large-cap stocks and mid-cap stocks, mid-cap stocks are expected to give better returns. Similarly, small-cap shares are also expected to outperform large-cap stocks because they are also trading at their maximum valuation."

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On how to accumulate more money in 2020, Aziz said, "One should invest in all types mutual funds by allocating 35 per cent portfolio in debt mutual funds and 65 per cent funds in equity mutual funds." On the ideal fund allocation in equity mutual fund to have a balanced investment portfolio, Aziz said that one should invest 60 per cent fund in large-cap funds and rest 40 per cent in mid-cap and small-cap funds if one's risk appetite is low. However, if risk appetite is high, he or she can reverse the portfolio by allocating 60 per cent in mid-cap and small-cap funds while the rest 40 per cent in large-cap funds.

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