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What are multicap funds?
Multi cap funds are those equity funds that can invest across all the market capitalisations, themes and segments without any SEBI imposed caps on their exposures. However, these funds have to invest at least 65% of their total assets in equity and equity related instruments.
Why invest in multicap funds?
Fund managers of these funds can freely change their exposure to various market capitalisations and segments as per the changing market conditions. This allows them to exploit the market opportunities and manage their risk out of changing valuations and various technical and fundamental factors. By combining the stability of large cap companies and growth potential of midcap and small cap companies, multicap funds are better positioned to generate higher returns at lower risk.
Investing in multicap funds would also save the investors from the peril of changing their exposure to different equity fund categories due to changing market conditions. The fund manager of a multicap fund will do the same on behalf of its investors.
Top 10 Multi cap funds to invest
| Funds | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) | 7 Year Return (%) | 10 Year Return (%) | Link |
| Axis Multicap | 16.72 | 13.68 | — | — | — | Invest Now |
| Kotak Standard Multicap | 10.09 | 6.93 | 12.70 | 16.64 | 12.60 | Invest Now |
| SBI Magnum Multicap | 11.97 | 5.30 | 11.26 | 16.62 | 11.56 | Invest Now |
| Motilal Oswal Multicap 35 | 8.44 | 2.53 | 11.11 | — | — | Invest Now |
| Edelweiss Multicap | 12.29 | 5.12 | 11.55 | — | — | Invest Now |
| ICICI Prudential Multicap | 8.24 | 4.62 | 10.03 | 14.05 | 10.26 | Invest Now |
| Invesco India Multicap | 17.44 | 2.24 | 9.85 | 16.52 | 14.27 | Invest Now |
| HDFC Equity | 5.63 | 2.62 | 9.71 | 12.86 | 9.15 | Invest Now |
| Franklin India Equity | 14.20 | 4.21 | 9.17 | 14.26 | 11.49 | Invest Now |
| Nippon India Multicap
|
-0.12 | -0.32 | 5.55 | 11.24 | 9.96 | Invest Now |
(Data as on 24th December 2020: Source: Value Research)
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1. Axis Multicap
Axis Multicap Fund aims to invest in high conviction equity instruments with improved risk adjusted returns across market capitalizations and segments. This fund focuses on stocks expected to generate faster growth than its benchmark. It uses a bottom-up approach in identifying stocks that are at inflection points, such as industry consolidation, market share gain, improved management focus, sunrise industries, and favourable capital allocation and regulatory and policy changes.
| Asset Size | Rs 7,099 crore (As on 30.11.2020) | |||
| Returns | 1 Year (%) | 3 Year (%) | 5 Year (%) | 7 Year (%) |
| Fund | 16.72 | 13.68 | — | — |
| Benchmark
(S&P BSE 500 TRI) |
16.48 | 7.81 | 12.72 | 14.20 |
| Category average | 13.90 | 5.82 | 10.97 | 14.52 |
(Data as on 24th December 2020: Source: Value Research)
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2. Nippon India Multicap
Nippon India Multicap Fund is a trend-based fund that uses its flexibility to be overweight in specific market capitalisation or sector caps on the basis of prevailing market opportunities and future potential. Its exposure to large cap companies is aimed at capturing market movements and ensuring liquidity during volatility whereas its exposure to niche themes through midcap and small cap companies is aimed at generating alpha. The fund identifies quality midcap companies with excellent track record and scalable business models. It also prefers niche or emerging themes with sustainable competitive edges. The fund invests in deep value stocks, which are mispriced by markets due to non-fundamental reasons. The fund aims to benefit from economic revival through its allocation to themes like hotel/resorts, insurance, short cycle capex and urban discretionary spending.
| Asset Size | Rs 8,230 crore (As on 30.11.2020) | |||
| Returns | 1 Year (%) | 3 Year (%) | 5 Year (%) | 7 Year (%) |
| Fund | -0.12 | -0.32 | 5.55 | 11.24 |
| Benchmark
(S&P BSE 500 TRI) |
16.48 | 7.81 | 12.72 | 14.20 |
| Category average | 13.90 | 5.82 | 10.97 | 14.52 |
(Data as on 24th December 2020: Source: Value Research)
3. ICICI Prudential Multicap
ICICI Prudential Multicap Fund aims to invest in high conviction quality stocks across market capitalisations. To do so, it tries to identify companies that can transform themselves into future market leaders. The scheme is sector agnostic and uses a combination of bottom up and top down approach for stock selection. The top-down approach involves identifying macroeconomic trends and conditions whereas the bottom-up approach is used for selecting stocks on the basis of their growth prospects, financials, leverage levels, cash flows and quality of corporate governance.
| Asset Size | Rs 5,847 crore (As on 30.11.2020) | |||
| Returns | 1 Year (%) | 3 Year (%) | 5 Year (%) | 7 Year (%) |
| Fund | 8.24 | 4.62 | 10.03 | 14.05 |
| Benchmark
(S&P BSE 500 TRI) |
16.48 | 7.81 | 12.72 | 14.20 |
| Category average | 13.90 | 5.82 | 10.97 | 14.52 |
(Data as on 24th December 2020: Source: Value Research)
4. Kotak Standard Multicap
Kotak Standard Multicap Fund identifies better performing sectors across market capitalisations and then, invests in the most promising ones. It uses top-down approach to identify the outperforming sectors and then, uses bottom-up approach for stock selection within the identified sectors. It takes concentrated bets on the sectors while maintaining diversified portfolio at the stock level. While making stock selection, it prefers companies with scalable and competitive business models, steady cash flows, high management bandwidth, efficient capital allocation and attractive valuation.
At present, the fund is focusing on businesses with low leverage, strong balance sheets and low fixed cost structure. It is presently overweight in cement and industrials due to their attractive valuations and has increased its exposure to FMCG stocks in the month of May 2020.
| Asset Size | Rs 32,441 (As on 30.11.2020) | |||
| Returns | 1 Year (%) | 3 Year (%) | 5 Year (%) | 7 Year (%) |
| Fund | 10.09 | 6.93 | 12.70 | 16.64 |
| Benchmark
(S&P BSE 500 TRI) |
16.48 | 7.81 | 12.72 | 14.20 |
| Category average | 13.90 | 5.82 | 10.97 | 14.52 |
(Data as on 24th December 2020: Source: Value Research)
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5. Edelweiss Multicap
Edelweiss Multicap Fund uses bottom-up approach for stock selection where the investment decision is primarily based on stock specific criteria rather of macroeconomic considerations. It aims at constructing its portfolio that can generate long term capital appreciation while surviving various market cycles. The fund claims to exercise high degree of due diligence to benefit from both power of compounding as well as valuation rerating.
| Asset Size | Rs 599 crore (As on 30.11.2020) | |||
| Returns | 1 Year (%) | 3 Year (%) | 5 Year (%) | 7 Year (%) |
| Fund | 12.29 | 5.12 | 11.55 | – |
| Benchmark
(S&P BSE 500 TRI) |
16.48 | 7.81 | 12.72 | 14.20 |
| Category average | 13.90 | 5.82 | 10.97 | 14.52 |
(Data as on 24th December 2020: Source: Value Research)
6. Invesco India Multicap
Invesco India Multicap invests in high conviction ideas across the market capitalisation spectrum with a long term outlook. It lays greater emphasis on the bottom-up approach for stock selection without any sector bias. Although the fund has the flexibility to change its exposure to different market capitalisations, it usually spreads its exposure to 30-50 stocks with 30%-50% of its portfolio in large cap companies and 50%-70% in small and midcap companies.
| Asset Size | Rs 1,035 crore (As on 30.11.2020) | |||
| Returns | 1 Year (%) | 3 Year (%) | 5 Year (%) | 7 Year (%) |
| Fund | 17.44 | 2.24 | 9.85 | 16.52 |
| Benchmark
(S&P BSE 500 TRI) |
16.48 | 7.81 | 12.72 | 14.20 |
| Category average | 13.90 | 5.82 | 10.97 | 14.52 |
(Data as on 24th December 2020: Source: Value Research)
7. Motilal Oswal Multicap 35
The investment strategy of Motilal Oswal Multicap 35 Fund is based on the principle of ‘Buy Right: Sit Tight’. ‘Buy right’ refers to investing in quality stocks at fair valuations while ‘Sit Tight’ refers to the concept of remaining invested for a longer period to exploit the full potential of the stocks from the entire growth cycle. While the scheme can invest in up to 35 equity and equity related instruments, it ideally seeks to limit its portfolio constituents to 25 or 30 stocks to mitigate the twin risks of diluting returns and higher market risk from over-diversification.
| Asset Size | Rs 11,791 crore (As on 30.11.2020) | |||
| Returns | 1 Year (%) | 3 Year (%) | 5 Year (%) | 7 Year (%) |
| Fund | 8.44 | 2.53 | 2.53 | – |
| Benchmark
(S&P BSE 500 TRI) |
16.48 | 7.81 | 12.72 | 14.20 |
| Category average | 13.90 | 5.82 | 10.97 | 14.52 |
(Data as on 24th December 2020: Source: Value Research)
8. HDFC Equity
HDFC Equity Fund aims to invest in companies from across market capitalization, major industry segments and economic sectors offers acceptable risk reward balance. For stock selection purposes, the fund identifies companies that can achieve above average growth, have good financials and distinct competitive advantages.
| Asset Size | Rs 20, 546 crore (As on 30.11.2020) | |||
| Returns | 1 Year (%) | 3 Year (%) | 5 Year (%) | 7 Year (%) |
| Fund | 5.63 | 2.62 | 9.71 | 12.86 |
| Benchmark
(S&P BSE 500 TRI) |
16.48 | 7.81 | 12.72 | 14.20 |
| Category average | 13.90 | 5.82 | 10.97 | 14.52 |
(Data as on 24th December 2020: Source: Value Research)
9. Franklin India Equity
Franklin India Equity Fund invests in companies across market capitalisation on the basis of the relative opportunities available in them. The fund claims to follow an active investment strategy by taking aggressive and defensive postures based on market opportunities available at different points in time. It follows a combination of value and growth investment styles and uses bottom-up approach to identify wealth creating stocks across sectors.
| Asset Size | Rs 8,841 crore (As on 30.11.2020) | |||
| Returns | 1 Year (%) | 3 Year (%) | 5 Year (%) | 7 Year (%) |
| Fund | 14.20 | 4.21 | 9.17 | 14.26 |
| Benchmark
(S&P BSE 500 TRI) |
16.48 | 7.81 | 12.72 | 14.20 |
| Category average | 13.90 | 5.82 | 10.97 | 14.52 |
(Data as on 24th December 2020: Source: Value Research)
10. SBI Magnum Multicap
SBI Magnum Multicap Fund uses bottom-up approach for selecting stocks across market capitalisations and segments. In its almost 15 years of existence, this fund has been able to deliver benchmark-beating returns in most market cycles.
| Asset Size | Rs 9,863 crore (As on 30.11.2020) | |||
| Returns | 1 Year (%) | 3 Year (%) | 5 Year (%) | 7 Year (%) |
| Fund | 11.97 | 5.30 | 11.26 | 16.62 |
| Benchmark
(S&P BSE 500 TRI) |
16.48 | 7.81 | 12.72 | 14.20 |
| Category average | 14.20 | 5.82 | 10.97 | 14.52 |
(Data as on 24th December 2020: Source: Value Research)
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6 Comments
sir , what about parag parikh long term equity fund? i wants to start sip in this fund.
Hello,
Parag Parikh Long term equity fund is also a very good fund. It has outperformed its benchmark in the last 1 year, 3years and 5 years period. You can definitely start your sip investments in this fund.
Hi my name is sandeep…m a very new in this investment market…I want to invest some money…which is the better in current situation
Either large cap or middle cap or small cap or multi cap…
And also which fund is better
Hi Sandeep, A mix of funds is always better. Nonetheless, if you are risk averse go for large cap funds.
I want to invest 5000 monthly for five years in multi cap fund. My aim is for capital appreciation for long term so which is the best multi cap fund to invest for at least 5 years.
Hi Dhiraj, you could pick any of the funds mentioned here. However, if you a vert new investor I would suggest to divide up your portfolio (investment) into 2 or 3 parts and invest in a large cap fund as well.