Best Multi-Cap Funds To Invest in 2022

The indifference to market capitalization is the best quality of mutual fund diversity. This article delves into the advantages and positioning of multi-cap funds. It also covers top multi-cap funds for you to invest in 2022.

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What Are Multi-Cap Funds?

Multi-cap funds are open-ended equity funds. Small-cap, mid-cap, and large-cap stocks are all represented in these funds. The funds are low-risk and cater to less risk-averse investors. You can easily pick from the portfolio of stocks without getting affected by market capitalization. The funds should include 65% of equity and equity-related instruments in assets.

In multi-cap funds, it is easy to switch between the small-cap, mid-cap, and large-cap stocks. The returns in this situation are higher and sometimes perform better than the pure large-cap funds.

Who Should Invest In Multi-Cap Funds?

The following categories of investors are best-suited for mutual fund investments:

  • Investment beginner looking for low-risk options

  • Novice investor seeking fund hedging

  • People looking to avoid market capitalization risks

  • Risk-averse investors

  • People looking to switch between portfolio funds

  • Expecting a stable return with consistent moderate growth

  • Looking for a long-term financial commitment

  • Do not have an active financial plan

Why Should I Invest In Multi-Cap Funds?

The best advantage of investing in a multi-cap fund is the risk aversion to the changing market conditions. You should not opt for the more aggressive, high-risk funds if you are uncomfortable with the risk-prone stock market. It is an ideal fund for beginners and could help you learn the market and the investment scenarios with hands-on experience.

While investing in multi-cap funds, you should consider the fund objectives with the risk, cost, and investment opportunities. When you invest in any plan or scheme, the first concern should be your financial goal. A primary evaluation of the multi-cap funds should be done using metrics like fund history, fund manager, expense ratio, financial ratio, and fund returns.

Benefits and Features of Multi-cap Funds

The features of multi-cap funds are in the below table:

Enable retail investors to invest a significant amount

A diverse portfolio

Empower wholesale investors

Lower market risks

Do not have the demerits of large-cap, medium-cap and small-cap funds

Validates the entry of new investors

Low financial risk

Retention of investment value over time

Not highly affected by changes in SEBI regulations

Dynamic asset allocation

Rate of returns offered is higher

Mixed portfolio helps widen investment options

The main benefits of having multi-cap funds in your investment portfolio are:

  • The funds are easy to invest in and provide flexible options.

  • The investment is time-saving as the fund portfolio is diversified.

  • The risk involved is less to moderate with comfortable investment options.

  • SIP investing offers some unique and exclusive benefits in the long term.

  • You may avail of applicable taxation benefits.

  • It is effortless to shift between market caps based on market situations and stock opportunities.

  • You can gain exposure to a varied market portfolio.

  • The focus is on the top-performing market sectors and stocks.

  • You may receive sustainable returns lasting up to seven years.

  • The funds are for long-term financial planning.

Best Multi-cap Funds to Invest

The best multi-cap funds to invest in 2022 are as follows:

  • Axis Multi-cap: The fund offers a return between 13 - 18%, and the fund size is Rs 3695.67 crores. The expense ratio is 0.54% with a Net Asset Value (NAV) of Rs 12.48.

  • SBI Magnum Multi-cap: The fund offers a return between 5 - 17%, and the fund size is Rs 7582.94 crores. The expense ratio is 0.94% with a Net Asset Value (NAV) of Rs 48.9.

  • Motilal Oswal Multi-cap: The fund offers a return between 2 - 12%, and the fund size is Rs 13634.94 crores. The expense ratio is 0.93% with a NAV of Rs 26.26.

  • Edelweiss Multi-cap: The fund offers a return between 5 - 13%, and the fund size is Rs 847 crores. The NAV is Rs 22.83.

  • Kotak Standard Multi-cap: The fund offers a return between 6 - 17%, and the fund size is Rs 26010.02 crores. The expense ratio is 0.64% with a NAV of Rs 36.81.

  • HDFC Equity: The fund offers a return between 2 - 13%, and the fund size is Rs 23737.12 crores. The expense ratio is 1.18%, with a NAV of Rs 585.83.

  • ICICI Prudential Multi-cap: The fund offers a return between 4 - 15%, and the fund size is Rs 3847 crores. The expense ratio is 1.11% with a NAV of Rs 275.55.

  • Nippon India Multi-cap: The fund offers a return between 0 - 12%, and the fund size is Rs.13634.94 crores. The expense ratio is 2% with a NAV of Rs.78.11.

  • Invesco India Multi-cap: The fund offers a return between 2 - 18%, and the fund size is Rs 849.99 crores. The expense ratio is 0.91% with a NAV of Rs 52.18.

  • Franklin India Equity: The fund offers a return between 4 - 15% and the fund size is Rs 11540.78 crores. The expense ratio is 1.09% with a NAV of Rs 569.93.

  • Parag Parikh Long Term Equity: The fund size is Rs 14590 crores with a net asset value of Rs 49.57.

  • UTI Equity: The fund size is Rs.22592 crores with NAV Rs 264.31.

  • Canara Robeco Equity Diversified: The fund size is Rs 5730 crores and the NAV is Rs 226.65.

  • DSP Blackrock Equity: The fund size is Rs 6744 crores and the NAV is Rs 67.33.

  • PGIM India Diversified Equity: The fund size is Rs 2031 crores and the NAV is Rs 26.5.

  • Mirae Asset India Equity: The fund size is Rs 29425 crores, and the NAV is Rs 79.76.

  • Principal Multi-cap Growth: The fund size is Rs 839 crores and the net asset value is Rs 230.09.

  • Quant Active: The fund size is Rs 1051 crores with no minimum investment.

  • Mahindra Badhat Yojana: The fund size is Rs 721 crores with no minimum investment.

  • Baroda Pioneer Growth: The fund size is Rs 1116 crores and the risk is high for this fund.

  • BNP Paribas Multi-cap: The fund size is Rs 590 crores with up to 66% return after the first year.

  • Aditya Birla Sunlife Multi-cap: The fund size is Rs 2614 crores with a minimum investment of Rs 1000.

  • Sundaram Equity: The fund size is Rs 796 crores with up to 62.7% return after the first year.

  • ITI Multi-cap: The fund size is Rs 288 crores with moderate risk and a first-year return of up to 57.2%.

The above list includes small-cap, medium-cap, and large-cap fund options.

In Conclusion

You should do credible research to invest in the best plan that matches your interests. You can also directly reach out to the stock portfolio providers and fund managers to learn more about the best fit. Weightage should be given to factors like expense ratio, per cent of returns for your specified investment time, net asset value, positioning of the fund manager.

FAQ's

  • Q. How may I receive the maximum benefits from a multi-cap fund?

    Ans: It is better to wait for 5-7 years to receive the maximum benefits on your investment. It is the ideal sustainable period for your funds to mature.
  • Q. What are the ways to invest in a multi-cap fund?

    Ans: You can go for online or offline mode depending on the investment you choose and their fund policies. The process will be hassle-free for registration & verification if you have all the required documents.
  • Q. What is the taxability of multi-cap funds?

    Ans: Since they are a class of equity funds, taxation is applicable. For short-term capital gains, the taxation rate will be 15%. The only tax exemption is for long-term capital gains of up to Rs.1 lakh. Anything above this scale will attract a taxation rate of 10%.
  • Q. What is market capitalization, and how do you calculate it?

    Ans: Market capitalization is a publicly traded company’s aggregate valuation. Also known as market cap, you can calculate it by multiplying the current price of a company’s market share with the total outstanding shares.
  • Q. What are the drawbacks of multi-cap funds?

    Ans: Multi-cap funds have minimal drawbacks. If you opt for diversification over the standard average limits, it might dilute the return percentage. The cost may be high when flexible strategies for the stock portfolio are adopted.
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