India, April 7 -- justify;">Building a diversified investment portfolio is important for reducing risk and earning risk-adjusted, optimum returns. A multi-asset allocation mutual fund and a multi-cap mutual fund; both can help you build a diversified investment portfolio. However, there are differences between the two mutual funds. In this article, we will understand the difference between these two types of mutual funds and which one you should choose.

Before we look at the differences between the two types of mutual funds, let us first understand what each of them is.

A multi-cap mutual fund is an open-ended scheme that invests at least 75% of its money in equity and equity-related instruments. The equity allocation is split in the fo...