A multicap fund is a mutual fund which invests across large cap, mid cap, and small cap stocks. Multicap funds have the ability to provide higher returns than other funds like large cap, mid cap and small cap mutual funds as they have the advantage of investing in equities irrespective of market capitalisation.
Also, with multicap funds, this diversification and rebalancing across market caps is available at a lower cost as compared to a situation where you had to switch between large, mid and small cap mutual funds by yourself. This is primarily because the latter option can involve exit load and capital gains taxation with every switch, where this is not the case when a multicap fund makes portfolio changes.
Best Multicap Funds 2019
|Fund’s Name||1 Year Return||3 Year Return||5 Year Return|
|Franklin India Focused Equity Fund||9.27%||13.86%||18.91%|
|Kotak Standard Multicap Fund||7.01%||16.45%||18.65%|
|Axis Focused 25 Fund||0.04%||16.85%||16.75%|
|Reliance Focused Equity Fund||-0.63%||13.31%||13.28%|
|SBI Focused Equity Fund||2.12%||14.21%||18.47%|
(Data as on April 30, 2019; Source: Fund Factsheets)
1. Franklin India Focused Equity Fund
Franklin India Focused Equity Fund is an established fund which was launched more than a decade ago in July 2007. The scheme has outperformed its benchmark during both the short-term (1 year) as well as long-term (5 year) periods. It is a relatively aggressive multicap scheme which has invested more than half of its assets in consumption-driven sectors. It is a suitable scheme for achieving capital appreciation.
2. Kotak Standard Multicap Fund
Kotak Standard Multicap Fund is a great multicap fund which has given returns better than its benchmark during all the above-mentioned periods – 1 year, 3 year and 5 year. The scheme has adopted an aggressive stance in allocation of its assets across sectors as it has invested a majority of its assets in cyclical sectors rather than defensive sectors. It is a suitable scheme for investors seeking long-term capital appreciation by investing in a concentrated equity portfolio.
3.Axis Focused 25 Fund
Axis Focused 25 Fund is a relatively young multicap fund which made its debut in June 2012. However, the scheme has still succeeded in acquiring a position in the list of best 5 multicap funds with its impressive performance. It has outperformed its benchmark during 3 year as well as 5 year periods. The scheme follows a focused approach and invests only in 25 stocks. It is a relatively aggressive focused fund as it is highly bullish on cyclical sectors, especially financial services. It is an ideal investment option for appreciation of capital over the long term.
4. Reliance Focused Equity Fund
Reliance Focused Equity Fund is a focused multicap fund which invests in up to 30 stocks. The scheme has demonstrated an impressive long-term performance, during the previous 3 year and 5 year periods, wherein it has given returns better than its benchmark. It is a relatively aggressive multicap fund which invests has given a higher weightage to cyclical sectors than defensive sectors in its portfolio. It is a suitable pick for investors who have a moderately high risk appetite and who are seeking a scheme which invests in good quality companies with an optimal mix of growth and value plays.
5. SBI Focused Equity Fund
SBI Focused Equity Fund is one of the oldest players of the multicap segment. The scheme made its debut in September 2004, nearly 15 years ago. The scheme has outperformed its benchmark by a margin of more than 4% during the last 5 year period. The scheme follows a relatively conservative approach when it comes to allocation of its assets across capitalisations as it has invested a majority of its assets in fundamentally-strong large cap stocks.