These are mutual funds that as per SEBI are allowed to inVEST across market capitalisation and sectors and hence are riskier when compared to pure large cap funds.
Multicap fund: Are Suitable For Whom?
These mutual funds suit investors with medium to high risk appetite as well as their investment horizon should be at least more than 3-4 years. Also, when you opt for multi-cap funds you do away with the need to take a larger dig into other funds so as to have a comprehensive coverage of the markets.
Also, these given the current landscape of high volatility where Indian markets taking cues from global peers have corrected steeply in the wake of Covid 19 scare, investors shall still be better off by parking their investible surplus in multi-cap funds as their portfolio gets diversified.
So, as these funds can be fine tuned as per the fund manager's discretion based on the market conditions i.e. large, small and mid-cap can be lapped up as per their valuations, these can be winners in the current volatile times and can indeed be highly safe.
Further, as per the SEBI's directions, nearly 65% of the corpus is to be invested in equity or equity related investment.
Multi cap mutual funds that offered 5 time return in 10 years
1. SBI Focused Equity Fund:
It is a CRISIL 4-star rated fund with NAV for the regular growth plan at Rs. 153.58 as on March 2, 2020. For the SIP, minimum investment needed is Rs. 500 and for one-time Rs. 5000. Against the category average of 10%, the scheme has offered 19% return in one year.
Top holdings of the fund are mainly in large cap and include HDFC Bank, Bharti Airtel, P&G, SBI, Divis Lab.
In 10 year term, the scheme in lump sum investment of Rs. 1 lakh has given a corpus of Rs. 4.64 lakh while through the SIP of Rs. 10000 per month for 10 years, the fund is now worth Rs. 27. 16 lakh.
2. Invesco India Multicap fund:
It is a 2 star rated fund by CRISIL and has total assets under management of Rs. 899.64 crore. Expense ratio of the fund is 2.48% and SIP investment in the scheme can be made for Rs. 500 while for lump sum you require Rs. 1000. The NAV of the scheme as on March 2, 2020 is Rs. 48.73.
In the run up to 10 years period, the value of Rs. 1 lakh invested in the scheme now equals to Rs. 4.19 lakh while SIP investment of Rs. 10000 over the last 10 years is valued at Rs. 25.12 lakh.
Top portfolio constituents include HDFC Bank, RIL, Infosys, Apollo Hospitals, ICICI Bank etc.
3. Kotak Standard Multi-cap fund:
It is a 4-star rated multi cap fund with fund size of huge Rs. 30,546 crore. NAV of the fund is Rs. 35.31. 62% of the funds are invested in large cap funds. For one time investment Rs. 5000 are required whilst with Rs. 500 one can start a SIP in the fund.
In 10-years period, the scheme has turned lump sum investment of Rs. 1 lakh into Rs. 3. 45 lakh while SIP investment of Rs. 10000 per month has grown into Rs. 24.30 lakh.
So, given the flexibility as well as scope these mutual fund offer, the investment shall be apt for you in the highly volatile time as the funds are diversified across equities of different market cap based of the investment objective of the fund.
Note: The data is aggregated from moneycontrol.com and Value Research online.
Mutual funds are subject to market risks and potential investors are suggested to read all the offer documents beforehand to have an insight on the finer print of the offering.
Disclaimer:The article is not a solicitation to buy, sell in securities mentioned in the article. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article.
About the author: Roshni Agarwal has been covering personal finance and investment planning for close to 5 years. She has a degree in MBA, Finance and writes on Mutual Funds, Stock Markets and Currency markets.