Multicap funds invest in companies of all sizes unlike other equity funds that usually restrict themselves to a market cap or sector.
Multicap funds are also very flexible because they do not have to adhere to any predefined limits unlike small-cap funds and other such funds.
Multicap funds can invest anywhere the fund manager deems fit.
This allows the mutual funds to adjust portfolios more dynamically when the market experiences ups and downs.
In this article
- 3 Best Multicap Funds 2018
- Bonus List: 7 Other Top Mutlicap Fund
- More About Mutlicap Funds
3 Best Multicap Funds 2018
The fund invests majorly in large cap funds and mid cap funds, and a very small proportion is invested in smalll cap funds. Thus, it is less risky than funds that invest majorly in small cap companies.
The fund has outperformed its benchmark, Nifty 500 consistently across various time periods. The returns of this fund vis-à-vis Nifty 500 over a 3 year period is shown in the following graph:
A monthly investment in this fund of ₹5000 for a period of 3 years will generate ₹2,31,334 assuming the fund continues to perform at historical rates.
The fund’s trailing 3 year annualized return of 17.05% is a testimony to the fact that it has consistently performed better than its benchmark.
The fund invests in various sectors like automobile, construction, energy, cement and cement products, comsumer goods, though investment in financial services is nearly one-third of the total corpus.
This fund is another consistently top performing funds. The investment objective of the scheme is to achieve long term capital appreciation by primarily investing in a maximum of 35 equity & equity related instruments across sectors and marketcapitalization levels.
The fund is suited for people who are looking to invest money for a period of more than 5 years.
At 3 year annualized return of 21.14%, the fund would yield ₹2,41,381 upon committing ₹5000 each month for a period of 3 years.
The above mentioned funds are a part of Groww 30 Best Mutual Funds to Invest in 2018.
Bonus List: 7 Other Top Mutlicap Fund
More About Mutlicap Funds
Multi cap funds are funds that diversify investments within equities on the basis of the size of the company it invests in.
Accordingly, there can be small cap funds, mid cap funds, and large cap funds. The limits segregating these funds vary from one fund house to another.
Investments in equity are considered to be riskier than debt investments due to market volatility. However, equity investments can further be classified into investments made in large companies (large cap), mid size companies (mid cap) and small companies (small cap) on the basis of market capitalization of the company.
Accordingly, small cap companies are typically companies with greater growth potential, and are therefore the most risky. On the other hand, large companies are companies that have already established themselves and their prices are therefore less volatile.