<p><em>“Balance is not something you find, it’s something you create” - Jana Kingsford</em></p>.<p>Life is all about balance, whether at home or at work. It is essential not only for survival but also to thrive and grow. Leading a happy, fulfilled life requires balance, which can be achieved through mindful financial planning and savings. Investments play a critical role in creating this balance.</p>.<p>Investments can be approached in two ways: you can either put all your eggs in one basket, relying on a high-conviction idea, or diversify across several options. A concentrated portfolio might bring high rewards if your selected stock performs well, but it also exposes you to greater risk. If the price movement of that stock doesn’t align with your expectations, the potential disappointment could be significant.</p>.<p>On the other hand, a diversified portfolio protects your downside by spreading risk across different stocks, making it a more balanced and resilient approach. Diversification helps manage risk, not only across different stocks but also in terms of market capitalisations.</p>.<p>A well-diversified portfolio, particularly in terms of market capitalisation, can help spread risk while allowing you to participate in India’s growth story. This means investing in a mix of large, mid, and small companies—some of which may be mature businesses, others that are in growth stages, and some smaller companies that are growing rapidly due to their lower base.</p>.Expect increased market volatility this week.<p>The multi-cap category is an excellent example of this approach, offering a balanced exposure of at least 25 per cent to large-cap, 25 per cent to mid-cap, and 25 per cent to small-cap stocks. This means that if broader market conditions put pressure on small and mid-sized companies, the large-cap exposure helps cushion the downside, and vice versa.</p>.<p>The multi-cap category is one of the fastest-growing segments in the Indian mutual fund industry, and for good reason. It strikes a careful balance between diversification and discipline by maintaining fixed exposure to large, mid, and small companies at any given time. In contrast, the flexi-cap category, while also meant to invest in large, mid, and small-cap stocks, tends to lean more heavily toward large caps. As a result, over a three-year period, flexi-cap funds have delivered lower returns compared to the multi-cap category.</p>.<p>The multi-cap category is relatively new and currently represents only a small portion of the overall equity assets under management. However, given its strong growth trajectory, it’s likely that this category will continue to expand rapidly, becoming one of the larger segments in the mutual fund industry. With its potential for long-term growth, the multi-cap category is an attractive investment option for those looking to diversify and balance their portfolios. Now is the perfect time to seize the opportunity and be part of this growing sector.</p>.<p><em>(The writer is Fund Manager and Head of Equity Research, SAMCO Mutual Fund)</em></p>
<p><em>“Balance is not something you find, it’s something you create” - Jana Kingsford</em></p>.<p>Life is all about balance, whether at home or at work. It is essential not only for survival but also to thrive and grow. Leading a happy, fulfilled life requires balance, which can be achieved through mindful financial planning and savings. Investments play a critical role in creating this balance.</p>.<p>Investments can be approached in two ways: you can either put all your eggs in one basket, relying on a high-conviction idea, or diversify across several options. A concentrated portfolio might bring high rewards if your selected stock performs well, but it also exposes you to greater risk. If the price movement of that stock doesn’t align with your expectations, the potential disappointment could be significant.</p>.<p>On the other hand, a diversified portfolio protects your downside by spreading risk across different stocks, making it a more balanced and resilient approach. Diversification helps manage risk, not only across different stocks but also in terms of market capitalisations.</p>.<p>A well-diversified portfolio, particularly in terms of market capitalisation, can help spread risk while allowing you to participate in India’s growth story. This means investing in a mix of large, mid, and small companies—some of which may be mature businesses, others that are in growth stages, and some smaller companies that are growing rapidly due to their lower base.</p>.Expect increased market volatility this week.<p>The multi-cap category is an excellent example of this approach, offering a balanced exposure of at least 25 per cent to large-cap, 25 per cent to mid-cap, and 25 per cent to small-cap stocks. This means that if broader market conditions put pressure on small and mid-sized companies, the large-cap exposure helps cushion the downside, and vice versa.</p>.<p>The multi-cap category is one of the fastest-growing segments in the Indian mutual fund industry, and for good reason. It strikes a careful balance between diversification and discipline by maintaining fixed exposure to large, mid, and small companies at any given time. In contrast, the flexi-cap category, while also meant to invest in large, mid, and small-cap stocks, tends to lean more heavily toward large caps. As a result, over a three-year period, flexi-cap funds have delivered lower returns compared to the multi-cap category.</p>.<p>The multi-cap category is relatively new and currently represents only a small portion of the overall equity assets under management. However, given its strong growth trajectory, it’s likely that this category will continue to expand rapidly, becoming one of the larger segments in the mutual fund industry. With its potential for long-term growth, the multi-cap category is an attractive investment option for those looking to diversify and balance their portfolios. Now is the perfect time to seize the opportunity and be part of this growing sector.</p>.<p><em>(The writer is Fund Manager and Head of Equity Research, SAMCO Mutual Fund)</em></p>