For investors wishing to diversify their portfolio with a disciplined exposure to large-cap, mid-cap, and small cap segments, HDFC Asset Management Company has announced the launch of a new fund offer - HDFC Multi-Cap Fund.
Following the Sebi's categorization and rationalisation of mutual fund categories in October 2017, numerous large-cap and flexi-cap schemes were promoted as multi-cap funds with a stronger exposure to the large-cap segment. Many of the so-called multi-cap schemes were merged or reclassified as a result of this.
HDFC Multi-Cap Fund
HDFC Asset Management Company has introduced the HDFC Multi Cap Fund's New Fund Offer. The programme will invest a minimum of 25% of its total assets in large, mid, and small cap companies, with the remaining 25% allocated based on the fund manager's market view. The NFO will begin on November 23 and end on December 7.
The fund's goal is to achieve long-term capital appreciation by investing in large-cap, mid-cap, and small-cap firms' equity and equity-related instruments. There is no guarantee that the Scheme's investment objective will be met.
This scheme's fund manager will be Gopal Agrawal. Agarwal has a solid track record, having previously spent ten years with Mirae Asset Global Investments (India). So far this year, HMCF is the third multicap fund to be launched.
The fund manager's 25% allocation bandwidth will offer him some leeway to play across market caps as market conditions change. For example, if the market begins to fall due to a trend reversal, the fund manager may allocate to large-cap companies to limit the downside. If market circumstances are favourable, the fund may raise its allocation to small-cap companies to boost returns.
The scheme's benchmark index is the NIFTY500 Multicap 50:25:25 Index.
Diversification is the cornerstone of mutual fund investing. This fund also provides diversification across market capitalizations. The fund could be a good option for investors who wish to diversify across market capitalization without having to participate in a lot of different funds. However, whether the fund manager can generate alpha, or profit, for investors, in the long run, remains to be seen.