Mutual Funds have become a famous investment choice among several investors. But let’s be honest, all this talk about caps can get a bit confusing and difficult to keep up with. Small-call, mid-cap, large-cap, multi-cap… I am here to tell you that you need not worry.
This blog will tell you everything you need to know about multi-cap funds so that you can invest with confidence. To start with, let’s understand exactly what multi-cap funds are.
Imagine if you could invest in multiple stock options across caps or all the stocks listed in the NSE/BSE. That is exactly what multi-cap funds do. As the name suggests, they are equity mutual funds that primarily invest in stocks of companies that fall in small-cap, mid-cap, and large-cap categories.
The proportion of investment in each category depends on the objective of the fund. Multi-cap funds are a suitable option for long term wealth creation for investors with a moderate risk appetite.
Who Should Invest In Multi-Cap Funds?
Investing in multi-cap funds depends on factors such as portfolio allocation, risk levels, investment goals, etc. But multi-cap funds have certain benefits that appeal to investors such as:
Investing across multiple caps allows the fund to diversify its investments and get the best out of each cap
Small-cap and mid-cap investment risks are balanced out with the large-cap investments
Multi-cap funds are less volatile than small-cap and mid-cap funds
Multi-cap funds can offer potentially higher returns than large-cap funds
What Are The Risks Of Investing In Multi-Cap Funds?
Although multi-cap funds are a good option for investors with a moderate risk appetite, these funds carry risks such as:
Multi-cap funds are prone to market fluctuations just like other funds
Small-cap and mid-cap funds might increase volatility to multi-cap funds
The Fund Manager’s judgement is crucial to get the best out of multi-cap funds
These funds are not suitable short term investments
Should You invest In Multi-Cap Mutual Funds?
Investing in any mutual fund scheme should depend on your investment goals and the risk that you are willing to take. Even if you are a new investor or an experienced one, consulting a wealth coach can help you invest based on your needs.
With that being said, multi-cap funds are suitable for investors looking for long term wealth creation options with a balanced risk and reward ratio. Since multi-cap funds invest across market caps, the fund manager can reallocate investments in small-caps, mid-caps or large-caps depending on market trends.
Cube has made it easy for you to invest in mutual funds through the Quick SIP feature. You can browse various risk levels and get recommendations based on your needs all while starting with an investment amount as low as ₹1000. Why wait when you can download the Cube Wealth app today to know more?
List Of Multi-cap Funds Currently Being Recommended By Cube's Advisor
SBI Magnum Multicap Fund
Kotak Equity Opportunities Fund
Invesco India Growth Opportunities Fund
ICICI Prudential India Opportunities Fund
Motilal Oswal Focused 25 Fund
Note: All facts & figures are as of 14/12/2020. While we update our blogs regularly, we advise you to download the Cube Wealth app for more details. Not much of a reader? Check out this video on how Cube helps you invest in the best mutual funds.
1. What is multicap fund?
Ans. A multi-cap fund invests in large-cap, mid-cap, small-cap stocks. It tries to balance the high risk, high reward nature of small-cap stocks & mid-cap stocks with the stable and low risk nature of large-cap stocks.
2. Which is best multicap fund?
Ans. The Cube Wealth app gives you access to the best multi-cap funds. Wealth First, Cube's mutual fund advisory partner, curates a list of the best multicap funds every month. Download the Cube Wealth app to know more.
3. Is it good to invest in multicap funds?
Ans. Multi-cap funds offer benefits like diversification across market caps. However, whether or not you should invest multi-cap funds would depend on your risk profile and investment goals.
An efficient way to learn more about both is to take the simple risk analysis quiz on the Cube Wealth app. Wealth First, Cube's mutual fund advisory partner, curates a list of the best multi-cap funds for Cube Users.
Multi-cap funds serve as versatile investment options that cater to a broad range of investors with varying risk appetites and financial goals. These funds invest in a diversified portfolio of stocks across market capitalizations, allowing them to adapt to changing market conditions and capitalize on opportunities in different sectors.
The flexibility inherent to multi-cap funds enables them to participate in growth potential across large-cap, mid-cap, and small-cap stocks. Investors can benefit from the fund manager's expertise in shifting allocations to seize favorable market conditions or manage risks.
on stock picking, poring over excel sheets, financial news, analyzing market trends, tracking the Sensex, researching company fundamentals, comparing mutual funds, reading financial reports, trying to predict the future & losing your sanity!