Diversified Equity Mutual Funds

Companies in Diversified Equity Funds

Diversified Equity Funds are classified into various categories, based on the type of companies in which it initiates an investment. There are 3 main categories which are explained below:

1. Small Cap Diversified Funds - Small Cap Diversified Mutual Funds are characterized as high risk and high return funds. These funds are suitable for young investors - those who fall below 35 years of age. However, it is important that these funds are managed carefully, in order to prevent losses and ensure good returns.

1. Mid Cap Diversified Funds - Mid Cap Diversified Mutual Funds invest in companies with market capitalization worth Rs. 4000 Crores to Rs. 20,000 Crores. These funds are comparatively less riskier than small cap diversified mutual funds. If investment is made in the right mid cap funds, the investor has a high chance of earning absolute returns on investment.
2. Large Cap Diversified Funds - Large Cap Diversified Mutual Funds invest in companies with market capitalization worth Rs. 20,000 Crore and above. Generally, the investment is made in shares of popular blue chip companies.

Nifty is the index which is used as a benchmark by large cap diversified equity mutual funds. Since investment is made in high ranking companies with good capital worth, the risk probability is very low.

Different Types of Diversified Mutual Funds

1. Balanced Funds or Hybrid Funds: Under these funds, investments are done in several asset classes including debt and equity. Some of the examples of hybrid funds are equity savings funds, multi-asset funds, conservative hybrid funds, aggressive hybrid funds, balanced hybrid funds, and arbitrage funds.

1. Large and Midcap Mutual Funds: Investments are made in midcap stocks and large cap stocks. The investment requirements are minimal.

1. Value Funds: The strategy that is followed is value investing. Investments are made in stocks that are considered undervalued.

1. Multi Cap Funds: Investments can be made in any sector. The investments depend on the fund manager.

Important Points to Consider when Investing in Diversified Equity Mutual Funds

Some of the points that you must consider before investing in diversified equity mutual funds are mentioned below:

1. Risks

1. Return

1. Objective of the fund

1. Expense ratio

1. Objective of the investment

1. Investment horizon

Advantages of Investing in Diversified Equity Mutual Funds

The main advantages of investing in diversified equity mutual funds are mentioned below:

1. You can invest in the global markets.

1. Investors can follow different strategies.

1. The time that is spent to monitor your portfolio reduces.

1. Long-term financial goals can be achieved.

Top Diversified Equity Funds in India 2025

Disclaimer

Mutual Fund investments will be subject to market risks. Any mutual fund listed in the document does not guarantee fund performance or its underlying creditworthiness. Do read the mutual fund document thoroughly before investing. Specific investment needs and other factors have to be taken into account while designing a mutual fund portfolio.

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