The Mutual Fund Show: Is It Time To Move Out Of Small-Cap Funds?

Investors should explore portfolios tailored to their goals when considering investments in small and mid-cap companies, according to Kshitiz Mahajan, managing partner and chief executive officer of Complete Circle Wealth Solutions LLP.

Query 1: I wish to invest Rs 1 lakh per month through SIP in mutual funds, which will yield good returns. Can you suggest some funds to achieve my goals?

Name: Dr Dibya Prakash Bathwal I Age: 62 years.

Kalpen Parekh: Ideally, a flexi-cap fund or balanced (advantage) fund, as having some cushion of fixed income in a portfolio is tax-efficient and volatility-efficient.

Kshitiz Mahajan: You should allocate 20% to Nifty 50 and the rest in balanced advantage fund or flexi-cap fund.

Query 2: We recently celebrated our son's first birthday and received a gift amount of Rs 10 lakh. We want to invest the money in mutual funds and use it for his education and marriage. Is it a good idea to invest Rs 10 lakh in a small-cap fund? Or should I diversify between mid, small and large-cap funds?

Name: Arjun I Age: 33 years.

Kshitiz Mahajan: You should invest in STP. You can also invest the lump sum in flexi-cap and focused category. But, my suggestion is to do a systematic transfer plan instead of investing it in one go.