Multi Cap Funds: Top 5 Multi Cap Funds in 2020

What is Multi Cap Fund?

Before one invests, there's always a dilemma regarding the category of Mutual Funds one should invest in. Do you have to choose large cap, mid-cap, small-cap, multi-cap, or sectoral funds? One knows that every category comes with its own advantage and drawbacks. While large-cap funds provide better strength to your portfolio, mid-cap, and small-cap funds provide unusual high returns.

Sectoral funds can increase the gains if a specific sector is performing especially well. One fund category that stands out among the multitude because of its noticeable flexibility is that of the multi-cap category. Multi cap funds are diverse equity funds that invest in stocks of companies with various market capitalizations. I wipe the investments out of varying proportions to satisfy the investment aim of the fund.

Why Should you Invest in Multi Cap Funds?

Fund managers of those funds can freely change their exposure to varied market capitalisations and segments, as per the changing market conditions. This enables them to take advantage of the market opportunities and manage their risk out of adjusting valuations and various technical and fundamental factors.

By combining the steadiness of huge cap companies and growth potential of mid-cap and little cap companies, multi cap funds are better stand to get higher returns at lower risk. Investing in Multi cap funds would also save the investors from the peril of adjusting their exposure to different equity fund categories thanks to changing market conditions. The fund manager of a multi-cap fund will do an equivalent on behalf of its investors.

Related: 8 Best Investing tips for beginners

Best Multi Cap Funds:

1. Kotak Standard Multicap

Kotak Standard Multi cap Fund identifies better performing sectors across market capitalisations then invests within the most promising ones. It uses top-down approach to spot the outperforming sectors then, uses bottom-up approach for stock selection within the identified sectors. It takes concentrated bets on the sectors while maintaining varied portfolio at the stock level.

While making stock selection, it prefers companies with scalable and competitive business models, steady cash flows, top management, high frequency, efficient capital allocation and attractive valuation. At present, the fund is that specialize in businesses with low leverage, strong balance sheets and low fixed charge structure. It's overweight in cement and industrial thanks to their attractive valuations and has increased its exposure to FMCG stocks within the month of May 2020.

2. ICICI Prudential Multicap

ICICI Prudential Multi cap Fund aims to take a position in high conviction quality stocks across market capitalisations. To do so, it tries to spot companies which will transform themselves into future market leaders. The scheme is sector agnostic and uses a mixture 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 employed for choosing stocks on their growth prospects, financials, leverage levels, cash flows and quality of corporate governance.

3. Parag Parikh future Equity Fund Direct Growth

This fund has given 13.71% annualized returns within the last three years. Within the last year, its returns were 26.94%. it's continually hit its benchmark within the Equity segment. It is one among the foremost remarkable Equity mutual funds in India. This fund has steadily outperformed other similar funds, providing 26.94% returns within the last one year. Minimum payment investment amount required to take a position during this scheme is ₹1,000. Minimum SIP investment amount necessary for this scheme is ₹1,000.

Related: 8 Business analyst tools for growth of the business

4. Mahindra Multi Cap Fund

This fund has given 5.16% annualized returns within the last three years. Within the last year, its returns were 13.55%. it's continually hit its benchmark within the Equity segment. It is one among the foremost remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 13.55% returns within the last one year. Minimum payment investment amount required to take a position during this scheme is ₹1,000. Minimum SIP investment amount necessary for this scheme is ₹500.

5. Nippon India Multi cap

Nippon India Multi cap Fund may be a trend-based fund that uses its flexibility to be overweight in specific market funding or sector caps on current market opportunities and future potential. Its exposure to corporation companies is aim toward capturing market movements and ensuring liquidity during volatility whereas its exposure to niche themes through mid-cap and little cap companies is aim toward generating alpha.

The fund identifies quality mid-cap companies with excellent diary and scalable business models. It also prefers niche or appearance themes with sustainable competitive edges. The fund invests in deep value stocks, which are mis-priced by markets thanks to non-fundamental reasons. The fund aims to profit from economic revival through its allocation to themes like hotel/resorts, insurance, short cycle capex and concrete discretionary spending.

Latest Post: Startup loan for Business in India - Finance to new businesses