Should you invest in Opportunity Mutual Funds?

Should you invest in Opportunity Mutual fundsShould you invest in Opportunity Mutual Funds?

There are various classes of mutual funds where investors can invest. It could large cap mutual funds, diversified funds, sector based funds etc. under equity mutual funds segment. However there is one category of mutual funds where fund managers are finding it as unique investment ideas in the form of Opportunity Mutual Funds. In this article, I would discuss about Opportunity Mutual Funds, to whom they are suitable and what parameters one should consider before investing in Opportunity Mutual Funds.

What are Opportunity Mutual Funds?

Opportunity Mutual funds are those which are like diversified mutual funds, but have flexibility to invest across various sectors and across various market capitalization tapping unique investment opportunities.

Also read: Should you invest in Global Mutual Funds?

How Opportunity Mutual Funds differ from equity mutual funds?

Equity mutual funds have investment objective where they invest in large cap, mid-cap/small-cap or sector based investment approach. They confront basically only to the investment objectives specified in the scheme objectives.

On the other hand, Opportunity mutual funds would not restrict that it would invest only across sectors. If required, they would majority of them in a particular sector to tap any good investment options. It can invest in a specific market capitalization segment. Let us take some example. Currently due to new RBI Governor aggressive comments, all best banking stocks are rallying and they are expected to rally for some more time. Under these situations, these opportunity mutual funds may invest in such banking sector stocks to tap short term investment options. Similarly during bad economic times, mid-cap/small-cap stocks may take beating, in such case, they can restrict themselves to large cap sector.

How many Opportunity Mutual funds are running currently?

Currently there are 12 mutual fund schemes which are running based on this opportunity investment approach.

How is the performance of Opportunity Mutual funds?

Running opportunity mutual funds are not that easy. These would purely depend on fund manager approach in tapping good investment ideas among the available options. We have analyzed their performance in last 5 years and seen that out of 12 opportunity mutual funds, only 5 mutual fund schemes have provided returns which are above bank interest rates. Balance 7 funds are under-performers.

Performance of Opportunity Mutual funds are enclosed below

Should you invest in Opportunities Mutual funds

Should you invest in Opportunity Mutual funds?

  • You should consider some points before investing in opportunity mutual funds.
  • You should read and understand the investment objectives / approach of the opportunity mutual fund scheme. The performance of such mutual fund would purely depend on the capability of fund manager in choosing winning stocks.

Also Read: Best Investment Options to get monthly / regular income

  • These funds can focus on specific sectors based on investment approach and they can be risky. Well managed fund can grow your money faster and underperformers can erode your capital.
  • Performance may not be always consistent. Good performer can lag behind after few years based on various economic conditions.

Conclusion: You can invest in opportunity mutual funds after understanding how they work. Best way to start, is to identify mutual funds suitable for you under this category and look for consistent performers with low risk profile. They would be the best mutual funds to grow your money faster.

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Should you invest in Opportunity Mutual Funds?


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