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Invest in Best Mutual Funds
for Higher Returns & Tax Savings

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The moment we think about making an investment, off late mutual funds is what comes to our mind immediately which has become a very common and important tool of investment. Presently, it appears to be the most preferred choice of investors, majorly due to its attributes to provide better returns when compared to the traditional tools of investment.

What are Multi-cap Funds


Before one invests, there is always this dilemma with regard to the category of mutual one has to invest in. Should it be  – large-cap, mid-cap, small-cap, multi-cap, or sectoral funds?. One must know that each category comes with its own advantage & disadvantages. While large-cap funds provide better stability in the portfolio, midcap and small cap funds provide exceptionally high returns. Sectoral funds can contribute in  providing a kicker to the returns if the sector is performing exceptionally well.

Nevertheless among all these categories one fund that stands out due to its considerable flexibility to invest anywhere is multi-cap category. In other words, Multi-Cap funds are diversified equity funds that invest in stocks of companies with different market capitalizations in varying proportions to meet the investment objective of the fund.

Performance of Multi cap funds

Benchmark Comparison of equity funds vs S&P BSE Sensex Index



Equity Schemes

1 year 3 year 5 years

7 years


28.87% 7.84% 11.85%


Mid and Small-cap

47.16% 20.33% 20.00%


Multi-cap/ Diversified

28.87% 7.84% 11.85%


(Less than 1 year on absolute basis & more than 1 year on CAGR basis)


One may find from the above table that benchmarking returns of large-cap and multi cap for past 5-7 years are almost the same. This means that investor can invest in either of these funds, but when we talk about actual returns, multi-cap funds have been successful in providing better returns to its investors.

Why Multi-Cap funds should be considered


Funds in other categories like large-cap, mid-cap, small-cap, multi-cap, have restriction mandates and are constrained to stick to the companies that are defined by their portfolio. For example a large cap fund will not be able to invest into mid and small cap stocks even if the valuations in these market might seem lucrative. Similarly a midcap fund is forced to remain invested in mid and small cap stocks even when the market is not performing upto the mark. In such a scenario a multi-cap fund works out to be a better choice for the investor.

Therefore in the long run, multi-cap funds are usually better wealth creators than other categories of funds as they can take advantage of investment opportunities across market. Further, returns from multi-cap category are comparable to mid-cap category over the long term which come with lesser volatility.

Who should be investing in multi-cap funds?


Investors who are moderate risk-takers, and who do not have the inclination to research on a specific fund in the market, may consider investing in multicap schemes for long-term wealth creation. As already discussed above, these funds have the potential to offer superior returns than large-cap, but offer less returns when compared to mid and small-cap funds.

Therefore, if you have an exposure to multi-cap fund, you will have exposure to companies of different sizes and you will be reasonably diversified with simplicity.


What are the risk factors in Multi- cap funds?


Since these schemes also invest in mid-cap and small-cap stocks, they are riskier than large-cap schemes that invest mostly in large companies.In a robust economic environment, the fund manager of a multi-cap fund can increase his exposure on mid and small sized companies to benefit from earnings. He can also choose to move investor money from shares of mid cap companies to large- cap companies to take a shelter, when he expects prolonged down periods. Hence you may find volatility in this segment of funds.

How do I choose a multi-cap equity fund?


Since a multi-cap fund invests across different market caps, the fund manager’s views are critical in determining the fund’s performance. It is advisable to check the fund manager’s past record and long-term performance of the fund before investing based on parameters like three-year and five-year average annualized returns, volatility and portfolio concentration.

It is also important to have a look into the portfolio this fund has invested during the tenure. As multi-cap funds are not confined to investing in any specific market,it is of utmost important for investor to have a look into the sectoral trends, as there might be some sectors that one would  not prefer investing in, hence you might drill down to that level of detail and decide accordingly.

Top performing multi-cap funds


For the convenience of investors who are interested in this segment, here are few hand picked funds which have provided exceptional returns during the last 7 years which you may consider investing in.


Scheme Name

1 year (%) 3 year (%) 5 year (%)

7 year (%)

Tata Equity PE Fund

40.17 18.47 22.86


DSP BlackRock Opportunities Fund

38.75 18.22 20.37


Aditya Birla Sun Life Advantage Fund

38.28 17.50 22.42


SBI Magnum Multicap Fund

36.50 17.11 21.00


Franklin India Opportunities Fund

36.20 13.64 18.65 13.46

What a wise investor should do

As said wisely do not put all your eggs in one basket. An investor should diversify his investment, in Equity ( large-cap, Mid and Small-Cap, Multi-Cap), Debt and other instruments including a portion in traditional method.

If you haven’t invested yet, you can start by investing in our hand picked mutual funds  and have an experienced investment team work for you


If you had invested Rs 10,000
every month for last 25 years
in equity funds, you could make

₹ 3.3 Crores
at 15%* annual returns

Rs 30 Lakhs

Rs 3.3 Crores

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