Multi-cap mutual funds are the kind of funds which invest their corpus in stocks of large-cap, mid-cap, and small-cap companies. Because of the varied market capitalisation, a multi-cap fund is a suitable investment tool for investors seeking diversification. They are riskier than large-cap funds but have the potential to generate better returns. To make it easier for you, here’s a list of the best multi-cap funds in India. Take a look!
|1.||Kotak Multi-Cap Fund||NAV: ₹10.48|
AUM: ₹4125.01 Cr
Expense Ratio: 1.93%
|2.||ICICI Prudential Multi-cap Fund||NAV: ₹458.71|
AUM: ₹7037.4 Cr
Expense Ratio: 1.92%
|3.||Nippon India Multi-Cap Fund||NAV: ₹163.09|
AUM: ₹14160.27 Cr
Expense Ratio: 1.92%
|4.||Quant Active Fund||NAV: ₹433.03|
AUM: ₹3544.03 Cr
Expense Ratio: 2.63%
|5.||Edelweiss Recently Listed IPO Fund – Direct Plan – Growth||NAV: ₹16.800|
AUM: ₹906.67 Cr
Expense Ratio: 0.94%
|6.||Sundaram Multi Cap Fund – Growth (Principal Growth Fund)||NAV: ₹232.57|
Expense Ratio: 2.13%
|7.||Invesco India Multi-Cap Fund||NAV: ₹77.99|
AUM: ₹2375.64 Cr
Expense Ratio: 2.01%
|8.||ITI Multi-Cap Fund||NAV: ₹13.37|
AUM: ₹514.62 Cr
Expense Ratio: 2.64%
|9.||Baroda BNP Paribas Multi Cap Fund – Regular Plan – Growth||NAV: ₹170.52|
AUM: ₹1677.64 Cr
Expense Ratio: 2.26%
|10.||Mahindra Manulife Multi Cap Badhat Yojana – Direct Plan – Growth||NAV: ₹22.51|
AUM: ₹1544.63 Cr
Expense Ratio: 0.44%
Kotak Multi-Cap Fund is one of the top multi-cap funds which has allocated at least 25% of its assets to large, mid, and small cap equities, respectively, for maximum gain. With the assistance of their unique model, the remaining 25% will be distributed in a dynamic manner. Everybody who has long-term financial goals can use this fund.
ICICI Prudential Multi-cap Fund focuses on locating equities across industries that are probably going to become market leaders in the future. The scheme’s large cap exposure attempts to deliver less volatile, fair returns while mid and small caps offer the chance for longer-term, higher capital appreciation. This fund is appropriate for investors who have investment horizons of at least five years.
Nippon India Multi Cap Fund is one of the top multi-cap funds which aims to blend the development potential of midcaps with the stability of large caps. It makes an effort to invest in a special mix of businesses that have solid fundamentals, scalable business plans, and exposure to emerging themes. This product is appropriate for investors looking to invest in stock and securities with an eye on long-term capital growth.
Quant Active Fund employs a strategy that involves cherry-picking opportunities throughout the universe of companies using a sector agnostic investment approach and the stock selection process uses an unconstrained approach, allowing exploration of greater return potential.
Edelweiss Recently Listed IPO Fund is one of the top funds for investors seeking long-term capital growth and investment in equity and equity-related securities recently listed 100 companies or upcoming Initial Public Offer (IPOs).
Principal Growth fund formerly (Sundaram Multi Cap Fund – Growth) is an an open ended equity scheme with a minimum of 75% of the fund’s total assets must be invested in equity and equity-related products.This product is appropriate for investors looking to invest in equity and equity-related securities of companies with varying market capitalizations and who are looking for capital appreciation over the medium to long term.
Invesco India Multi-Cap fund is one of the top multi cap mutual funds which employs an investment strategy where it invests in large, mid, and small cap companies using a diversified approach. a bottom-up method with an emphasis on long-term growth and no sector bias is used to choose equities throughout the market size spectrum. The portfolio maintains exposure between 25% and 50% in large size firms, 50% in midcap and small cap companies, and 25% or less in small cap companies. The fund will own between 50 and 70 equities.
ITI Multi-Cap Fund offers agnostic portfolio construction, valuation based approach to analyze business and market cycles with active allocation between market cap segments. It is a potential long term wealth creation product. Suitable for investors seeking long term investment and growth.
Baroda Multi-Cap Fund is one of the top mutual funds offered by Bank of Baroda investing across various segments of the market. Suitable for investors seeking long term investment and investment in equity and equity related securities, debt and money market instruments and Gold ETF.
Mahindra Manulife Multi Cap Badhat Yojana’s Goal is to provide medium to long-term capital appreciation through appropriate diversification and a low risk on business quality. The diversified portfolio would primarily consist of equity and equity-related securities, including derivatives. However, there can be no assurance that the Scheme’s investment objective will be met.
Expected return rate (p.a)
Time Period (Years)
If you are considering investing in multi-cap funds, here are 4 reasons why you should:
Multi-cap funds invest in companies that provide varying market caps and sectors. This helps diversify the associated risks. Large-cap funds help stabilise the portfolio while small and mid-cap funds help boost capital.
Like mutual funds, multi-cap funds are highly liquid particularly due to their high trade volume. These open-ended equity schemes can be redeemed for cash and have zero lock-in period. Funds can be purchased and sold at ease.
The regulating risk associated with investing in multi-cap funds is lower. SEBI (Securities and Exchange Board of India) rules that investors can tweak their allocation according to the market direction. Fund managers can shift their focus to large-cap companies to avoid risks. Hence, concentrating on funds carrying varying risks is advantageous.
Fund managers are decision-makers in fund allocation. Companies hire fund managers according to their experience in handling funds with varying risk factors so that investors can maximise their returns.
Multi-cap funds can beat inflation and generate returns in the long run. Hence, these are the best options to invest your money for long term wealth generation. Since, there is a combination of different funds with varying levels of risks, the effect of volatility on market price also varies. Hence, there is a possibility of accumulating enough funds from different sources.
Multi-cap funds are essentially a mixture of funds with varying caps and risk factors. Investors who do not prefer picking individual stocks may choose multi-cap funds.
Since different funds react differently to market volatility, depending on one’s risk appetite and financial goals, fund managers allocate and alter the allocation as and when needed. For example, if small or mid-cap investments become expensive, fund managers can immediately shift their focus to large-cap stocks.
When large-cap and mid-cap funds are dealt with individually, investors should have at least 80%/65% of their portfolio in that corpus. Multi cap funds diversify risks because they provide a risk-weighted average return.
Find out whether you should or should not invest in multi-cap mutual funds:
Invest in Multi cap funds following these simple steps!
The best multi-cap funds in India have a dynamic investment strategy that helps in accumulating substantial wealth for achieving long-term financial goals. Before allocating your funds to a multi-cap fund, you must make sure that the objective of the scheme is in line with your financial goal.
Similar to equity funds, multi-cap mutual funds face market risk where the price fluctuations of the underlying assets impact the fund’s Net Asset Value (NAV). Hence, it’s vital for you to assess your risk-bearing ability before investing in such schemes.
These funds experience fluctuations in the short term, which generally average out in the future. Therefore, you might consider investing in this fund for a comparatively longer period. Furthermore, by investing for a longer duration, individuals can reap the benefits of the power of compounding.
Expense ratio refers to the annual charge that fund houses impose on investors to cover the cost of running a scheme. The expenses of a fund include advertisement costs, administrative costs, and more. It is ideal to choose a mutual fund with a lower expense ratio as this fee has a direct impact on your net returns. That said, make sure to take the other factors into account when choosing between different multi-cap funds.
Considering other fund options for investing? The Navi app gives you access to a host of funds that may suit your investment needs. You can start investing in SIPs or make a lump sum investment at your convenience.
As multi-cap funds are a type of equity fund, the taxability is similar to that of equity-oriented schemes. The rate of taxation depends on the holding period as well. If you sell units of your fund within a year, you need to pay short-term capital gains (STCG) tax of 15%. On the flip side, a holding period of over a year will attract long-term capital gains (LTCG) tax of 10% if your returns are more than Rs.1 lakh. In this case, you will be eligible for the indexation benefit.
Starting to invest in multi-cap funds is a good decision as it helps diversify your portfolio as well as increase the chances of good returns. Knowing about the advantages, taxability and factors to consider before investing in multi-cap funds can help you invest wisely and potentially accumulate substantial wealth, depending on market fluctuations. Visit Navi Mutual Fund and start investing today!
*Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
Ans: There is significant risk involved in multi-cap fund investments. Hence, it is important to consider the risk-return ratio before investing. To evaluate this, one can use metrics like the Sharpe ratio, which is an indicator of risk-adjusted return.
Ans: As multi-cap funds are equity instruments, investing in them for a short span may not lead to the achievement of your financial goals due to market volatility. However, such fluctuations can average out in the long run. Therefore, individuals might want to consider staying invested in these funds for as long as possible.
Ans: As per SEBI norms, Flexi cap funds must allocate at least 65% of their investment corpus to equity and equity-related instruments. There is no specific limit when it comes to asset allocation. However, it is mandatory for multi-cap funds to invest at least 25% of the fund corpus in each of the small-cap, mid-cap, and large-cap segments.
Ans: The proportion of large-cap, mid-cap and small-cap stocks in multi-cap funds depends on the fund managers. As per the economic and market scenario, the fund managers allocate the resources. That said, as per SEBI guidelines, multi-cap funds must invest at least 25% of their fund corpus in stocks belonging to each of the small-cap, mid-cap and large-cap segments.
Ans: No, there is no lock-in period in the case of multi-cap fund investments.
Ans: Short-term capital gains are those which can be sold in 1 year. Investors will need to pay a 15% tax on STCGs. Investments held for more than 1 year (long-term Capital gains) attract a 10% tax above Rs. 1 lakh.
Ans: Mutual funds pass on the dividends earned on the stocks to the investors. They can either receive them as cash or are reinvested in the fund’s shares. However, investors should pay taxes on such dividends.
Ans. Multi-cap funds place their corpus in a portfolio of equities from companies with a range of market capitalizations that are both equity- and equity-related. Consequently, investments in large, small, and mid-cap companies can all be found in a multi-cap fund.
Ans. Multi-cap funds are the best option for novice stock investors since they keep risk under control because of their diverse portfolio. A multi cap fund is their best option because these individuals might not be aware of the hazards associated with investing in firms of a particular size.
Ans. Multi cap funds have moderately high risk as they invest across debt and equity funds.
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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