With the increasing interest of people in the stock market, the number of investors investing money in mutual funds is also continuously increasing. Mutual funds provide a simple solution to investors who cannot study the stock market movements in depth but want to take advantage of high market returns. Currently, many types of mutual funds are available for investors with different needs.
Difference Between Two Mutual Funds
Both flex cap and balance advantage funds are counted among the popular mutual funds among investors. Today, we know these two mutual funds: their advantages and disadvantages. Which type of investors should invest in these? What are the similarities and differences between these two mutual funds?
These Are Called Flexi Funds
Whether a flexi cap mutual fund or a balance advantage fund, these mutual funds are preferred to provide the benefits of a diverse portfolio. Flexi-cap funds are mutual funds that invest in shares of all market caps. In the portfolio of a flexi-cap mutual fund, you will get all three types of claims: large-cap, mid-cap and small-cap.
Such Funds Are More Diverse
Flexi-cap mutual funds also have some limitations. The most significant limitation of such mutual funds is that they invest only in equities. This means that such mutual funds benefit you from a diverse portfolio within the scope of equity only. At the same time, the scope of the Balance Advantage Fund is broader. Balance Advantage Fund has both equity and debt instruments.
Which Is Better For You?
Now we understand both types of mutual funds, Flexi Cap Mutual Fund and Balance Advantage Fund. And also came to know what is the basic difference between the two. After this, the most important question arises: Which of the two is the better option for an investor? In response, experts say that both funds are suitable in their way. Which one is better for you depends on what your particular needs are.
Choose Based On Risk and Return
If you want to take less risk and keep your money safe, then the Balance Advantage Fund is a better option. These funds are less affected by sudden fluctuations in the market. However, the returns in these are also relatively low.
Whereas with flexi funds, the risk is higher, there are also possibilities of getting more significant returns. In short, flexi funds are better for risk-loving investors, while balance advantage funds are better for investors who prefer investment security.
