New Delhi, Aug. 13 -- Several mutual funds have started launching multi-factor funds. Unlike single-factor funds, these funds invest across factors such as value, quality, momentum, low volatility.

Different factors tend to do well in different phases of market and such funds aim to offer diversified exposure and navigate better through changes in market phases.

This article explains what multi-factor funds are, how they offer diversification and whether you should invest in them.

Single-factor funds focus on a specific factor from among factors such as low-volatility, value, growth, quality, momentum, alpha, etc. These single-factor funds may do well in a specific cycle of the market. For example, in momentum, funds are likely to do w...