What are Multi-Cap Funds
Multi-cap funds are mutual funds that invest in stocks across different market capitalisations, including large-cap, mid-cap, and small-cap companies. These funds aim to provide investors with a balanced portfolio by diversifying their investments across multiple sectors and market segments. With multi-cap funds, investors can benefit from the growth potential of small and mid-cap stocks while enjoying the stability of established large-cap companies. This diversification strategy allows investors to take advantage of different market cycles and potentially maximise their returns.
Features of Multi-Cap Funds
Dynamic asset allocation
Long-term investment
Higher risk
Benefits of Investing inMulti-Cap Mutual Funds
- Broad market exposure
Flexibility and adaptability
Benefit from portfolio diversification
Steady return potential over long term
Who Should Invest inMulti-Cap Funds
Conservative InvestorsMulti-Cap Value Funds, as these funds focus on stable, well-established companies with consistent earnings and dividends.
Moderate InvestorsMulti-Cap Blend Funds, as these funds strike a balance by investing in a mix of large-cap, mid-cap, and small-cap stocks.
Aggressive InvestorsMulti-Cap Growth Funds, which predominantly focus on mid-cap and small-cap stocks to target higher growth potential, albeit with increased risk.
Top Performing mutual funds
| Scheme Name | 5 Y | Value Research | ||||
|---|---|---|---|---|---|---|
 Nippon India Multi Cap Fund - Direct (G) | 24.97% | Invest Now | ||||
Nippon India Multi Cap Fund - Direct (B) | 24.97% | Invest Now | ||||
Nippon India Multi Cap Fund (G) | 24.06% | Invest Now | ||||
Nippon India Multi Cap Fund (B) | 24.06% | Invest Now | ||||
FAQs
Are multi-cap funds suitable for short-term investments?
Multi-cap funds are generally recommended for long-term investment horizons of five years or more to capture growth potential adequately. While short-term investments can be subject to market volatility, investors with a high-risk tolerance may consider allocating a portion of their portfolio to multi-cap funds for potential capital appreciation.
How often do multi-cap funds rebalance their portfolios?
Portfolio rebalancing in multi-cap funds typically occurs periodically, such as quarterly or annually. The objective of portfolio rebalancing is to maintain the desired asset allocation and ensure that the fund's investments align with its investment strategy. Regular rebalancing helps the fund maintain its intended risk profile and investment objectives over time.
Can I switch between growth and dividend options in multi-cap funds?
Yes, most multi-cap funds offer the flexibility to switch between growth and dividend options, allowing you to align with your investment preferences. The growth option reinvests any capital gains or dividends back into the fund, aiming for capital appreciation. The dividend option distributes the profits earned by the fund as dividends to the investors.
Do multi-cap funds have any tax advantages?
Like other equity-oriented mutual funds, multi-cap funds are subject to long-term capital gains tax (LTCG) if held for more than one year. However, tax implications may vary based on individual circumstances. Consult with a tax advisor or financial professional to understand the specific tax implications of investing in multi-cap funds based on your country of residence and applicable tax laws.
How can I invest in multi-cap funds with m.Stock?
To invest in multi-cap funds with m.Stock, open a demat account on our platform and follow the simple investment process. Create an account on our website, review the available multi-cap funds, and choose the one that aligns with your investment objectives. Review the fund's prospectus for detailed information on its strategy, performance, fees, and risks. Invest in the fund by following the steps outlined on our platform.