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Investing in small caps is not a childs play. You will have to find successful fund managers who specialise in small cap stocks. You should also pay attention to how the schemes fared during the market downturn.
Mid cap schemes invest in mid cap stocks or in stocks of medium-sized companies. As per Sebi norms, mid cap schemes are mandated to invest in companies that are between 101 and 250 in market capitalisation.
Flexi cap mutual funds offer the fund managers the freedom to invest across market capitalisations and sectors/themes. It means the fund managers can invest anywhere based on his outlook on the market.
Tax saving mutual funds or ELSSs invest in stocks. Therefore, they have a very high risk. You should be aware of this aspect, especially if you are a first-time investor in equity mutual funds.
Balanced advantage funds invest in a mix of stocks, debt, and arbitrage opportunities. These funds decide their equity exposure depending on key market ratios or in-house parameters. They invest less in stocks when the market is very high or valuations are stretched. They invest more in equity when stocks are available at attractive valuations.