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Best Multicap Funds: Top 5 Equity Funds Gave Returns Above 32.39%
It has been five years since multicap fund category holding regulations were tweaked by the securities and exchange board of India (SEBI). In last 3 years 5 schemes have given returns above 32.39%.
Multicap fund is an equity mutual fund category that came into existence after the securities and exchange board of India (SEBI) noticed that erstwhile multicap funds were heavily skewed towards large cap stocks. Later SEBI capped the limit of holding percentage of stock in portfolio based on market capitalisation. The erstwhile multicap fund category was devoid of the mandatory minimum capping limits on the stock market capitalisation of the portfolio.
As per the revision, a multicap fund must have stocks of each of the market cap segment in the portfolio. A minimum of 25% each in small cap, mid cap and large cap stocks respectively. This further increased a minimum equity holdings by 75% making the fund category extremely risky for investments.
Mutli cap funds portfolio: Diversified Structure to balance risk-rewards
The multicap funds use a diversified investment approach with access to the entire market spectrum and not just limiting oneself to a single market cap. Even the market cap segment investing in large, small and mid cap segments can provide diversification to one's portfolio.
Large caps offer cushion during turbulent times as they are stable companies, while mid and small cap help drive the alpha. Thus, multicap fund balances risk and rewards well, and aims to create potential wealth creation in the long run.
Who should invest in Multicap funds?
A multicap fund is suitable for:
- Investors that are new to the equity market
- Confused investors who are unsure about which equity fund to invest
- Long-term investors who have an investment horizon of nearly 5 years or more
Given below are top performing schemes.
| Scheme Name | 6-month Returns (%) | YTD Returns (%) | 1-year returns (%) | 3-year returns (%) | 5-year returns (%) | Crisil Rating |
| Quant Active Fund | -9.70 | -12.80 | -2.25 | 49.83 | 19.83 | Rank 1 |
| Nippon India Multi Cap Fund | -2.48 | -3.85 | 8.77 | 39.55 | 13.48 | Rank 2 |
| Mahindra Manulife Muti Cap Fund | -4.05 | -6.01 | -1.10 | 37.16 | 15.94 | Rank 2 |
| ICICI Prudential Multicap Fund | -0.98 | -4.35 | 4.32 | 33.98 | 11.88 | Rank 3 |
| Invesco India Multicap Fund | -4.37 | -5.93 | -0.14 | 32.39 | 11.05 | Rank 3 |
In last 6 months all the 5 schemes have given negative returns owing to Adani and banking crisis, yet ICICI Prudential Multicap Fund returns were highest. Even the YTD returns were down for all the schemes. In last one year only Nippon India Multi Cap Fund and ICICI Prudential Multicap Fund have given positive returns.
All the funds considered are growth direct plans, the returns are taken from ValueResearch and ratings are from Crisil.
Disclaimer
Mutual fund investments are subject to market risk. The above-mentioned information is purely informational and doesn't guarantee any return. Greynium Information Technologies and the Author are not liable for any losses caused as a result of a decision based on the article.
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