ICICI Prudential's S Naren expects markets to remain volatile, suggests investing in multi cap and flexi cap funds

S Naren, ED & CIO at ICICI Prudential AMC on Thursday said he has been recommending categories like savings balanced advantage, equity and debt, balance and multi asset, along with flexicap funds for investments. This is because, he believes, next 3-5 years will see a fair amount of volatility.

"If investors have products where they can allocate money between equity and debt, they are likely to have a much better environment. Additionally, if they have products like flexicap category or multicap category, which again can allocate money between large, mid, small cap funds, they will have a much better category," Naren told CNBC-TV18.

For the uninitiated, flexi cap funds invest a minimum of 65 percent of their assets in equity and equity-related instruments. They are free to take exposure to large-cap, mid-cap, and small-cap stocks without any restrictions as they invest across market capitalisation. This underlying nature makes them a decent investment fund as large-caps have better liquidity and stability than mid-caps and small-caps in volatile stock markets. On the other hand, multicap funds can be great wealth creators in the long run as they can take advantage of the investment opportunities across the market.