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Multi Cap Funds

In today’s dynamic market, whenever you think of investment, you think of mutual funds. However, which fund should you invest in to ensure maximum benefit. The answer is multicap funds. View More

Multicap mutual funds are diversified funds that invest in stocks across market capitalization. They put their corpus in a portfolio of equity and equity-related stocks of companies holding varying market capitalizations. The proportion of investment is done depending on the investor’s risk tolerance capacity. This way, fund managers can leverage investment opportunities and work on the best permutation combination scheme for optimum wealth creation through investments in the best multicap mutual funds.

Best Multi Cap Funds

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Who Should Invest in Multicap Funds?

Before we discuss the category of investors most suitable for multicap funds, we need to first understand the different categories of multicap funds and the comparative performance of different types of equity funds. View More

Types of Multicap Funds:
Multicap funds with a focus on large-cap stocks- These schemes focus on investing primarily in large-cap shares, and then they explore the opportunities in the other sectors.

Multicap funds with a focus on small/mid-cap stocks- These schemes focus mainly on investments in small and mid-cap shares and consider large-cap stocks to play safely in case of any downside.

No specific focus on market capitalization- These schemes invest in stocks that show high prospects to outperform. Hence, they look for investment opportunities across market capitalization.

Hence, multicap funds are best suited for :

Those investors are looking for wealth creation as their objective in the long run but have moderate risk tolerance.
People who do not understand the nuances of individual stock pricing or find it difficult to decide which market capitalization fund to put their money in.
Investors who have a horizon of 10 years and above.
Those looking for volatility in their segment of funds want to benefit from their earnings under any given market scenario.

Features of Multicap Funds

Before plunging into investing in Multicap funds and studying which is the best multicap fund to invest in, you need to know the features and characteristics of these funds in detail. View More

Freedom of Investment
Multicap funds have a wide spectrum where your equity mutual fund portfolio comprises different market cap funds compiled into one. This provides your fund manager with the freedom to invest and pick up stocks that suit your investment objectives the best and decreases your portfolio’s dependency on the market cap size.

Provides Flexibility
Multicap funds generate flexibility for new opportunities across the market. For moderate risk-taking investors, these funds provide scope for growth across the market without capital size restrictions.

Risk Regulator
Multicap funds provide freedom from capital size restrictions, and hence the risk involved in investing in equity is mitigated, especially when the markets are volatile. A good multicap fund acts as the risk regulator in your wealth creation process.

Better Returns
Multicap funds open scope for better returns as they are not dependent on one particular category of stock selection. They have a large universe of stocks to choose from and invest in. Hence, fewer stocks in diversified funds make for a better portfolio with lesser risks and higher expectations on returns.

Factors to consider while investing in Multicap Funds

Here is a list of factors you can consider before investing in multicap funds. View More

Performance of Multi-Cap Mutual Funds
When considering a multi-cap fund, the investor should look at the overall performance of the fund. It includes the fund managers’ credentials, the P/E ratio, EPS, Enterprise value, and past returns. Depending on the goal and the investment horizon, investors should also consider how the key investments made by the fund will play a role in the coming five to ten years and make an informed decision accordingly.

Risk To Return Ratio
Like other equity-linked funds, multi-cap funds are prone to higher risks and thus fall in the high-risk category. The fund experience high volatility due to market conditions. However, the volatility can be higher than a large-cap fund and generally lower than a small-cap fund. So depending on the type of fund and overall objective, the risk factor of this fund can vary.

Asset Allocation
Some expenses bite into your returns when you invest in multi-cap funds, and you need to be aware of them before investing. You will have to pay an expense ratio as commission to Asset Managing Companies to manage your multi-cap funds on an annual basis as a charge for administrative and operating expenses.

Taxability of Multicap Funds

Like other mutual funds, multicap funds are also taxable. For every investment, it is the post-tax returns that matter. To rule that out, you need to be well versed with the taxation policies for multicap funds. The capital gains you make on selling on multicap funds that are taxed, depending upon how long you hold on to these investments. View More

Short-term Capital Gain Tax (STCG)- When you sell your multicap stocks within a year, they are categorized under short-term capital gains, and a tax rate of 15%, as of date, is levied on the capital gains earned from them.

Long-term Capital Gain Tax (LTCG)- Any multicap stocks held for more than a year are classified as long-term capital gains. The returns of less than a lakh in a financial year are tax-free, and beyond that, a tax rate of 10%, as of date, is levied on the capital gains earned from them.

The Risk Involved With Multicap Funds

Multicap funds have their own set of risks and expenses that come attached with them. As someone who is an investor, you should be aware of these in detail before you step forward to invest in them. View More

Investment Goals
Multicap funds are best suited for those looking at a minimum of 5 years of investment horizon and are in a state to block their money for this period. Only then can they make the most out of their funds through investment in multicap mutual funds.

Risks Involved
When you invest your money in multicap funds, you invest in equity stocks in the share market. Hence, you are exposed to the risks that come attached with it. Considering this fact, short to medium-term markets can be volatile, and returns may not be very satisfactory. So, you need to accept this fact before investing in this category of mutual funds.

Expense Ratio
Some expenses bite into your returns when you invest in multicap funds, and you need to be aware of them before investing. You will have to pay an expense ratio as commission to Asset Managing Companies to manage your multicap funds for you on an annual basis as a charge for administrative and operating expenses.

Advantages of Multicap Mutual Funds

Multicap mutual fund invests in all three kinds of companies – India’s biggest, mid-size, and small companies. Like every other category of funds, multi-cap funds have their share of advantages. View More

Diversification
Multicap funds offer a diversified portfolio as they invest in companies of various sizes and sectors. This way, spreading out investments on different sectors or parts lowers the risks and keeps things in control.

Exposure
You get exposed to every opportunity available in the Indian market as these funds do not restrict themselves to any one sector. Hence, there is wider exposure to all key sectors driving and ruling the Indian economy.

The Prevailing Market Condition
Multicap funds invest in a mix of large, medium, and small-cap funds, depending on the present market scenario. Hence, they yield the best returns by getting the best from all three different categories of companies, ruling the market.

Popular Multi Cap Funds

  • Fund Name
  • Min SIP Investment Amt
  • AUM (Cr.)
  • 3Y Return

Quant Active Fund – Direct Growth is an Multi Cap scheme that was launched on 07-01-13 and is currently under the management of our experienced fund manager Sanjeev Sharma. With an impressive AUM of ₹5,348 Crores, this scheme's latest NAV is ₹519.5663 as of 18-08-23.

Quant Active Fund – Direct Growth scheme has delivered a return performance of 15.5% in the last 1 year, 33.3% in the last 3 years, and an 20.2% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Multi Cap funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹5,348
  • 3Y Return
  • 15.5%

PGIM India Flexi Cap Fund – Dir Growth is an Flexi Cap scheme that was launched on 04-03-15 and is currently under the management of our experienced fund manager Aniruddha Naha. With an impressive AUM of ₹5,972 Crores, this scheme's latest NAV is ₹31.25 as of 18-08-23.

PGIM India Flexi Cap Fund – Dir Growth scheme has delivered a return performance of 8.9% in the last 1 year, 23.6% in the last 3 years, and an 14.4% since its launch. With a minimum SIP investment of just ₹100, this scheme offers a great investment opportunity for those looking to invest in Flexi Cap funds.

  • Min SIP Investment Amt
  • ₹100
  • AUM (Cr.)
  • ₹5,972
  • 3Y Return
  • 8.9%

Parag Parikh Flexi Cap Fund – Direct Growth is an Flexi Cap scheme that was launched on 28-05-13 and is currently under the management of our experienced fund manager Rajeev Thakkar. With an impressive AUM of ₹39,848 Crores, this scheme's latest NAV is ₹60.0775 as of 18-08-23.

Parag Parikh Flexi Cap Fund – Direct Growth scheme has delivered a return performance of 14.1% in the last 1 year, 23.6% in the last 3 years, and an 19.2% since its launch. With a minimum SIP investment of just ₹1,000, this scheme offers a great investment opportunity for those looking to invest in Flexi Cap funds.

  • Min SIP Investment Amt
  • ₹1,000
  • AUM (Cr.)
  • ₹39,848
  • 3Y Return
  • 14.1%

Canara Robeco Flexi Cap Fund – Direct Growth is an Flexi Cap scheme that was launched on 02-01-13 and is currently under the management of our experienced fund manager Shridatta Bhandwaldar. With an impressive AUM of ₹10,217 Crores, this scheme's latest NAV is ₹267.36 as of 18-08-23.

Canara Robeco Flexi Cap Fund – Direct Growth scheme has delivered a return performance of 8.9% in the last 1 year, 20.8% in the last 3 years, and an 14.3% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Flexi Cap funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹10,217
  • 3Y Return
  • 8.9%

Invesco India Multicap Fund – Direct Growth is an Multi Cap scheme that was launched on 02-01-13 and is currently under the management of our experienced fund manager Pranav Gokhale. With an impressive AUM of ₹2,695 Crores, this scheme's latest NAV is ₹103.8 as of 18-08-23.

Invesco India Multicap Fund – Direct Growth scheme has delivered a return performance of 16.8% in the last 1 year, 26.2% in the last 3 years, and an 18% since its launch. With a minimum SIP investment of just ₹1,000, this scheme offers a great investment opportunity for those looking to invest in Multi Cap funds.

  • Min SIP Investment Amt
  • ₹1,000
  • AUM (Cr.)
  • ₹2,695
  • 3Y Return
  • 16.8%

UTI-Flexi Cap Fund – Direct Growth is an Flexi Cap scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Ajay Tyagi. With an impressive AUM of ₹25,821 Crores, this scheme's latest NAV is ₹264.1951 as of 18-08-23.

UTI-Flexi Cap Fund – Direct Growth scheme has delivered a return performance of 1.9% in the last 1 year, 18.5% in the last 3 years, and an 14.4% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Flexi Cap funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹25,821
  • 3Y Return
  • 1.9%

DSP Flexi Cap Fund – Direct Growth is an Flexi Cap scheme that was launched on 02-01-13 and is currently under the management of our experienced fund manager Atul Bhole. With an impressive AUM of ₹8,827 Crores, this scheme's latest NAV is ₹80.198 as of 18-08-23.

DSP Flexi Cap Fund – Direct Growth scheme has delivered a return performance of 13.7% in the last 1 year, 22.8% in the last 3 years, and an 15% since its launch. With a minimum SIP investment of just ₹100, this scheme offers a great investment opportunity for those looking to invest in Flexi Cap funds.

  • Min SIP Investment Amt
  • ₹100
  • AUM (Cr.)
  • ₹8,827
  • 3Y Return
  • 13.7%

Edelweiss Flexi Cap Fund – Dir Growth is an Flexi Cap scheme that was launched on 03-02-15 and is currently under the management of our experienced fund manager Trideep Bhattacharya. With an impressive AUM of ₹1,294 Crores, this scheme's latest NAV is ₹29.093 as of 18-08-23.

Edelweiss Flexi Cap Fund – Dir Growth scheme has delivered a return performance of 12.7% in the last 1 year, 24% in the last 3 years, and an 13.3% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Flexi Cap funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹1,294
  • 3Y Return
  • 12.7%

Franklin India Flexi Cap Fund – Direct Growth is an Flexi Cap scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Anand Radhakrishnan. With an impressive AUM of ₹11,698 Crores, this scheme's latest NAV is ₹1238.5188 as of 18-08-23.

Franklin India Flexi Cap Fund – Direct Growth scheme has delivered a return performance of 15.6% in the last 1 year, 27.8% in the last 3 years, and an 16.1% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Flexi Cap funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹11,698
  • 3Y Return
  • 15.6%

Tata Flexi Cap Fund – Direct Growth is an Flexi Cap scheme that was launched on 06-09-18 and is currently under the management of our experienced fund manager Sonam Udasi. With an impressive AUM of ₹2,356 Crores, this scheme's latest NAV is ₹18.9792 as of 18-08-23.

Tata Flexi Cap Fund – Direct Growth scheme has delivered a return performance of 10.5% in the last 1 year, 18.9% in the last 3 years, and an 13.8% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Flexi Cap funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹2,356
  • 3Y Return
  • 10.5%

Frequently Asked Questions

Is there any proportion of allocation for multi-cap funds?

There is no specific proportion that fund managers need to allocate to multi-cap funds. It enables the fund manager to make decisions without worrying about allocation like other funds. This flexibility allows the fund to diversify in multiple companies, be it small-cap, mid-cap, or large-cap. Fund managers will make decisions based on existing market conditions and promise of return, making this the ideal option for first-time investors. 

Who should invest in multi-cap funds?

Investing in multi-cap funds is ideal for someone who wants to diversify their portfolio and does not want to focus only on a particular cap, i.e., small-cap, mid-cap, or large-cap. Since multi-cap companies invest in multiple company types irrespective of their market capitalization, they have a relatively lower risk than small-cap or mid-cap, while also being ideal for a long-term investment horizon of at least 5-7 years. 

Are multi-cap funds subject to taxation? 

Since multi-cap funds invest in equity and equity-linked instruments, a tax is levied on capital gains or profits from selling the multi-cap fund. The tax is 15% if the investment is sold within 12 months, which is the short-term capital gains tax (STCG). For any capital gains post the 12 months, the long-term capital gains (LTCG) tax is levied at 10%.

Are multi-cap funds risky?

As multi-cap funds primarily invest in equity-linked instruments, the stocks are exposed to risk and are volatile to market conditions in the short term. So, multi-cap funds are categorized in the high-risk category.

What are the advantages of investing in a multi-cap fund?

Multi-cap funds offer several advantages to investors, such as the ability to diversify their portfolio into multiple sectors without any limitation of the company’s market cap. It also allows the fund manager to consider the best options per market conditions, enabling the investors to get a comparatively minimum risk and exposure to all key sectors and companies.

Is there a lock-in period for a multi-cap fund?

For most multi-cap funds, there is no lock-in period. Investors can invest and exit at anytime as per their preference.

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