Best Multi Cap Mutual Fund Schemes :Multi-cap mutual funds are an important category of equity mutual funds, which are very popular among retail investors. The main reason for this is that through multi-cap funds, investors get an opportunity to invest in stocks with different market caps simultaneously. Next, we will give information about those top multi-cap funds, which have given an average annual return (CAGR) of more than 25% in the last 5 years. Along with this, we will also know what is the specialty of multi-cap funds, due to which they are considered beneficial for retail investors.
Features of Multi Cap Funds
The main objective of multi-cap funds is to invest in companies with different market caps (large, mid and small caps). These funds always invest by dividing their portfolio in a fixed ratio, which gives investors the benefit of a consistently balanced and diversified investment. As per SEBI guidelines, it is mandatory to invest at least 75% of the portfolio of a multi-cap fund in equity and equity-related instruments. Also, it is mandatory to invest at least 25% of it in large cap stocks, 25% in mid cap stocks and 25% in small cap stocks.
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Those giving more than 25% returnsMulti Cap Funds
Here we have listed multi-cap funds that have given an average annual return (CAGR) of more than 25% in the last 5 years. All these multi-cap funds have the same benchmark index: Nifty 500 Multicap 50:25:25 Total Return Index, which has an average annual return of 26.26% in the last 5 years. All these funds are placed in the very high risk category on the riskometer.
1.Quant Active Fund
– 5-year average annual return (Direct Plan): 34.84%
– 5-year average annual return (Regular Plan): 33.16%
– Assets under management (AUM): Rs 11,186.98 crore
2. Mahindra Manulife Multi Cap Fund
– 5-year average annual return (Direct Plan): 30.62%
– 5-year average annual return (Regular Plan): 28.43%
– Assets under management (AUM): Rs 4,780.57 crore
3. Nippon India Multi Cap Fund
– 5-year average annual return (Direct Plan): 28.57%
– 5-year average annual return (Regular Plan): 27.64%
– Assets under management (AUM): Rs 39,091.90 crore
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4. Invesco India Multicap Fund
– 5-year Average Annual Return (Direct Plan): 27.00%
– 5-year average annual return (Regular Plan): 25.34%
– Assets under management (AUM): Rs 3,976.44 crore
5. Baroda BNP Paribas Multi Cap Fund
– 5-year average annual return (Direct Plan): 26.48%
– 5-year average annual return (Regular Plan): 25.18%
– Assets under management (AUM): Rs 2,793.97 crore
6. ICICI Prudential Multicap Fund
– 5-year average annual return (Direct Plan): 25.20%
– 5-year average annual return (Regular Plan): 24.09%
– Assets under management (AUM): Rs 14,542.18 crore
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How suitable are multi-cap funds for small investors?
Multi-cap funds invest in large, mid and small cap companies, which gives investors a diversified portfolio. In this sense, small investors can take advantage of diversification even with less money through multi-cap funds. These funds give better returns in the long term by investing in small cap and mid cap stocks. In this sense, multi-cap funds can be considered as investments that give a balanced risk return ratio. On the one hand, these funds strengthen the portfolio by investing in large cap stocks and on the other hand, investment in mid and small caps gives the benefit of better growth prospects.
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Impact of minimum 50% investment in mid cap and small cap
Multi cap funds are considered a good option for long term wealth creation and diversification. But at the same time, one should not forget that at least 50% of its portfolio is invested in mid cap and small cap stocks. Due to this, the risk increases somewhat. This is the reason why their risk level on the riskometer has been kept ‘very high’. Obviously, before investing in them, investors must keep their risk taking capacity in mind. Also, one should avoid investing money in them for the short term.
(Disclaimer: The purpose of this article is only to provide information, not to recommend investment in any scheme. Past returns of equity mutual funds cannot be considered as a guarantee of similar performance in future. Take any investment decision only after getting complete information and taking advice from your investment advisor.)
