To create good wealth in the long run, it is not enough to just invest consistently, but choosing the right mutual fund is equally important. Often when investors think of adding a new fund to their portfolio, they get confused. Especially when they have different options like actively managed funds and factor-based index funds. In such a situation, if someone wants to start a SIP of Rs 10 to 15 thousand every month for the next 15 years, then it is important to understand where a good fund can be generated by investing.
According to experts, two funds look good at this time. The first is Nippon India Multicap Fund and the second is Edelweiss Nifty 500 Multicap Momentum Quality 50 Index Fund. Both of these come under multicap category, but their way of working is completely different.
Nippon India Multicap Fund is an actively managed scheme, in which the fund manager invests on the basis of his research. According to the rules, this fund is required to invest at least 25-25 percent in large cap, mid cap and small cap, while the remaining 25 percent of the money can be invested anywhere by the fund manager as per his understanding and market conditions. There is no fixed formula in this, rather companies are selected on the basis of research by the fund house.
On the other hand, Edelweiss's factor-based index fund works on a rule-based strategy. This fund selects only 50 such stocks from a large group of 500 companies, which meet the criteria of 'Momentum' and 'Quality'. If understood in simple language, it works like a mathematical filter, which automatically sorts shares according to market trends. Although this method is quite systematic, it may involve a little more risk and volatility during market fluctuations.
Harshvardhan Rungta's clear advice is that the investment approach of both the funds is fundamentally different. Investors who deeply understand the nuances of 'factor investing' and are not afraid of market fluctuations can consider index options from Edelweiss. At the same time, for those common investors who like simplicity and do not want to get into the complexities of investment, adding an actively managed multicap fund like 'Nippon India' to the portfolio can be a safer and wiser step. For a long view of 15 years, the most important thing is that you recognize your risk appetite, avoid unnecessary complications and keep your investments consistent in every market cycle. This is the real mantra to create big capital in the long run.
