For long-term capital appreciation investing in equity mutual funds is mostly preferred by the investors having long-term personal finance goals, let's say about more than 5 years. Because equity mutual funds outperform most investment vehicles in terms of inflation-adjusted returns, investors must adhere to long-term investment decisions, which are based on their investment horizon and risk tolerance. As a result, multi-cap funds deal in companies of all scale volume and across multiple categories when it comes to equity mutual funds. Multi cap funds are the funds that invest in large-cap, mid-cap, and small-cap companies based on their market capitalization. These are the funds that are ideal for investors with a low-risk tolerance and a long-term financial aim. By keeping all these factors in mind and the risk tolerance level of the investors, here we have compiled 4 best performing multi-cap mutual funds in 2021 based on ratings and returns.
Quant Active Fund Direct Growth
Among the multi-cap fund category, Quant Active fund is the only mutual fund that has generated huge returns in the last 1 year. In January 2013, this fund was launched by the fund house Quant Mutual Fund. When it comes to returns, the Quant Active Fund Direct-Growth returns over the past year have been 100.83 percent. It has returned an average of 21.46 percent per year since its inception.
The fund has equity allocation across the financial, FMCG, healthcare, metals, and construction industries. ITC Ltd., Fortis Healthcare (India) Ltd., ICICI Bank Ltd., State Bank of India, and Coal India Ltd. are the fund's top five holdings. The fund has an expense ratio of 0.50% and one can start SIP in this fund by a minimum amount of Rs 1000. The fund presently has Rs 736 crore in assets under management (AUM) and a NAV of Rs 387.65 as of July 16, 2021. There is no exit load on this fund and returns from one to five years are higher than the average rate in the category.
Mahindra Manulife Multi Cap Badhat Yojana
Mahindra Manulife Multi Cap Badhat Yojana Direct-Growth is a mutual fund scheme that was established in April 2017 by Mahindra Manulife Mutual Fund house. Mahindra Manulife Multi-Cap Badhat Yojana Direct has a growth rate of 75.27 percent during the last year. It has returned an average of 18.33 percent per year since its inception. The fund has its equity asset allocation across financial, technology, engineering, construction, and healthcare industries.
Infosys Ltd., State Bank of India, ICICI Bank Ltd., Reliance Industries Ltd., and Sun Pharmaceutical Inds. Ltd. are the fund's top five holdings. The fund has an expense ratio of 0.77 percent, and it is possible to start a SIP with a minimum of Rs 500. As of July 16, 2021, the fund has Rs 597 crore in assets under management (AUM) and a NAV of Rs 20.22. If units are redeemed within one year of initial investment, the fund levies a 1% exit load.
Baroda Multi Cap Fund Direct Growth
The 1-year returns for the Baroda Multi Cap Fund Direct-Growth are 67.96 percent. It has returned an average of 14.67 percent per year since its debut. The fund house Baroda Mutual Fund introduced this fund in January 2013. The fund's investments are mostly in the financial, technology, chemical, construction, and energy industries. Infosys Ltd., ICICI Bank Ltd., HDFC Bank Ltd., Reliance Industries Ltd - PPE, and Radico Khaitan Ltd. are the fund's top five holdings.
The fund has a 1.41 percent expense ratio, and you can start a SIP with as little as Rs 500. The fund has Rs 1,044 crore in assets under management (AUM) and a NAV of Rs 163.93 as of July 16, 2021. The fund charges a 1% exit load if units are withdrawn within one year of the initial investment.
Invesco India Multi Cap Fund Direct Growth
The 1-year returns for Invesco India Multicap Fund Direct-Growth are 75.40 percent. It has returned an average of 20.14 percent each year since its launch. Invesco India Multicap Fund Direct-Growth is a multi-cap mutual fund scheme that was established in January 2013 by Invesco Mutual Fund. The fund has its equity sector allocation across financial, automobile, healthcare, engineering, and construction industries.
ICICI Bank Ltd., Axis Bank Ltd., State Bank of India, Bharat Electronics Ltd., and KPIT Technologies Ltd. are the fund's top five holdings. The fund's AUM is Rs 1,409 crore, and its current NAV is Rs 85.70 as of July 16, 2021. One can start SIP in this fund with a minimum amount of Rs 500, and the fund charges an exit load of 0.98% if units are redeemed within 12 months.
Should you invest?
According to SEBI, multi-cap funds invest at least 25% of their capital in each of the three market segments: large-cap, mid-cap, and small-cap. These funds are well suited for investors having a 5-year investment horizon and who are ready to begin investing in mutual funds using a systematic investment plan (SIP). Multi-Cap funds invest in equity stocks, therefore they might be unstable in the short term and less risky in the long run.
You can optimize your portfolio with a corporate of any sector and a blend of different sectors with multi-cap funds, where the fund manager can diversify the funds across different industry sectors based on the market condition. These funds have generated an average SIP return of 32.13% in the last 3 years and 20.20% in the last 5 years, according to the data of Value Research. This purely implies that, for aggressive investors, investing in multi-cap funds can be a wise move as a substitute for mid-cap or small-cap funds in the long term.
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