What are Opportunity Funds and how to invest in them | Motilal Oswal
What are Opportunity Funds and how to invest in them | Motilal Oswal

What are Opportunity Funds and how to invest in them

If you’re concerned about satisfying your long term financial goals, you have to look no further than mutual funds. They’re currently one of the best investment options available to an individual. Not only do they offer portfolio diversification, they also present you with several opportunities for growth and wealth creation. 

And among the many different types of mutual funds to choose from, opportunity funds are something that do the job very well. Wondering what it is all about? Continue reading to find out what opportunity funds are.

  • What are opportunity funds?  

Opportunity funds are nothing but a type of mutual funds that use the pooled money of investors to purchase stocks of companies with high opportunities for growth. 

But then, how are companies classified as having high growth opportunities? Here’s where the mutual fund manager comes into the picture. As you may know already, all actively managed mutual funds have a mutual fund manager who is responsible for taking key decisions regarding the fund. They conduct extensive research through both fundamental and technical analysis on various companies to determine the ones that have high future growth potential.   

The primary purpose of opportunity funds is to maximize the wealth creation potential and deliver outperforming returns to the investors. Also, there are no restrictions with respect to the kind of companies or the kind of industries that opportunity funds invest in. Therefore, opportunity funds generally invest in companies operating under different industries and belonging to different market capitalizations. 

And since opportunity funds tend to invest only in companies with high future growth potential, the portfolio of the mutual fund keeps changing to keep pace with the ever evolving growth rates. For instance, if the auto and pharmaceutical industries are in the growth trajectory this year, the fund manager will include stocks from these industries into the portfolio of the fund. And in the next year, if the banking and infrastructure industries are in their growth phase, the fund manager will try to include companies from these industries. This goes on and on.   

  • How to invest in opportunity funds

Now that you’re aware of opportunity funds meaning, let’s quickly take a look at how you can invest in them. 

- Firstly, you would have to open a demat account and a trading account. 

- Once you’ve opened one, all that you have to do is log into the trading platform of your stockbroker. 

- And then, navigate to the mutual funds section. 

- Once you’re there, you can check out the various opportunity funds, their portfolio of stocks, and their performance. 

- Choose one that fits your needs and requirements and start investing.  

Conclusion

Opportunity funds are one of the best investment options when it comes to satisfying your long term financial goals. That said, keep in mind that they also carry a slightly higher risk too. If you wish to invest in opportunity funds, but don’t have a demat account to start off with, Motilal Oswal can help you out. Visit the website of Motilal Oswal right away to open a demat account within minutes. 

Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account

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