Flexi Cap vs Multi Cap vs ELSS Mutual Funds have become a very popular option in investment. The number of mutual fund investors has seen a steady increase. There are many ways to invest in mutual funds as well. Three of these methods are Flexi Cap, Multi Cap and ELSS. Which of these three options will give better returns? Let’s know the answer to this in the article.
There are many options available in the market for investment. Investors invest by taking risks for wealth creation. If we talk about investment options, then Flexi Cap, Multi Cap and ELSS are some of the most popular options in the market.
Many investors have also benefited by investing in all these options. But investors who are new to the investment sector always have a question in their mind that which of these options is going to be the best for them. Today we will try to explain to you the difference between these three options.
By the way, let us tell you that if you want to earn profit with the investment portfolio, then you should invest in any one of Flexi Cap, Multi Cap and Equity Linked Savings Scheme (ELSS).
Multi Cap Fund
Multi Cap Fund is a mutual fund. It is an equity mutual fund. Now let’s talk about what a multi cap fund is, as we have understood from its name that its portfolio is quite diverged. That is, the investor’s fund has shares from all three segments, large-cap, mid-cap and small-cap. The investor invests at least 25 percent in these three segments.
Understand it like this, if an investor wants to invest Rs 1 lakh, then he invests 25 percent of 1 lakh i.e. Rs 25,000 in large-cap, Rs 25,000 in small-cap and Rs 25,000 in mid-cap. He can invest the remaining Rs 25,000 in any fund of his choice.
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Flexi Cap Fund
Flexi Cap Fund also comes under equity mutual fund. The special thing about this fund is that it is the decision of the investor or fund manager as to which fund to invest in. There is no fixed limit of investment in this. Due to there being no limit, the investor can invest as per the expectation of growth.
For example, if an investor wants to invest Rs 1 lakh, he can invest in large-cap, mid-cap or small-cap as per his choice. That is, if he wants, he can invest Rs 70,000 in large cap, Rs 20,000 in mid-cap and Rs 10,000 in small cap. However, before investing, the investor should assess the growth.
Equity Linked Savings Scheme
Equity Linked Savings Scheme (ELSS) is quite popular in the market. According to the market regulator, the investor has to invest at least 85 percent of the amount under ELSS in shares. However, in this also, the investor decides how much to invest in which segment.
The reason behind the popularity of ELSS is its benefits. It is a tax saving scheme. In this, investors can save tax up to Rs 1.5 lakh under section 80C of Income Tax Act 1961. However, this scheme has a lock in period of 3 years. That is, the investor cannot withdraw from the fund for three years after investment.
Which option is right for you?
If you want diversification in your portfolio, then you can consider investing in a multi-cap fund. If you want to save tax, then ELSS will be a very good option. Apart from this, if you know which segment you should invest in at what time, then you can consider investing in a flexi-cap fund.
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