All You Need To Know About Multi-Cap Funds

The multi cap fund is a stock fund that is invested in a broader universe of equity securities without any capitalization constraint. The community of investors measures the size of a company by their market capitalization, which is calculated by multiplying the number of company’s shares by its present stock price. Companies can be grouped as small, medium or large companies.

Classification of Cap Funds

The cap fund generally does not focus on specific capitalization style but, it may invest across a full range of the market capitalization. Though there is no exact definition of the various market caps, the following parameters are maintained. They are –

  • Mega Cap – Above $200 billion.

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  • Large Cap – From $10 billion to $200 billion.

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  • Mid Cap – From $2 billion to $10 billion.

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  • Small Caps  – From $300 million to $2 billion.

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  • Micro Caps – Less than $300 million.

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In a target capitalization fund, the cap size mentioned provide information about the mutual fund investors, their focus on the size of investment and the fund size of the company. While not investing by capitalization, all-cap funds may have other targeted investment styles, or they may be flexible funds which focus just on capital appreciation.

Objectives of Multi-Cap Funds

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Multi-cap funds require greater monitoring from investors because of the broader universe available for the investment. Most of the time these funds will include a cap in the name of their fund, which requires investors to dig deeper for understanding their investing style. The registered funds should provide all the details about their investment objectives and strategies with the fund’s registration statement. These type of multi-cap funds can be managed both actively and passively.

Best Multi-Cap Funds

The trade war all over the globe between the top economies have made the stock markets volatile. Therefore, the wealth experts believe that investors should look at the multi-cap schemes. Presently, the most of the multi-cap schemes are inclined towards the large caps with a good amount of exposure to high growth investment ideas basically in the midcap spaces. Some of the best multi-cap schemes are listed below –

  • The Motilal Oswal Multicap 35 Fund

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  1. Top holding:  HDFC Bank, Maruti, HDFC
  2. Assets under management: ₹13,181 crore
  3. The return: 14.52 percent
  4. Name of the Fund Manager: Gautam Sinha Roy
  5. Top 10 holdings: 56.03 percent
  • Axis Focused 25

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  1. Top holding: Kotak Mahindra Bank, HDFC Bank, TCS
  2. Asset under management: ₹4,217 crore
  3. The return of 3 years: 15.44 percent
  4. Name of the Fund Manager: Jinesh Gopani
  5. Top 10 holdings: 55.5 percent
  • Aditya Birla Sun Life Equity

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  1. The top holding:  ICICI Bank, ITC, HDFC bank
  2. Assets under management: ₹9,376 crore
  3. The  return after three years: 13.92 percent
  4. Fund Manager: Anil Shah
  5. Top 10 holdings: 35.7 percent
  • Tata Equity PE Fund

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  1. Top  holding: HDFC, Yes Bank, Reliance Industries
  2. Asset under management: ₹3,924 crore
  3. The return after three years: 16.3 percent
  4. Fund Manager: Sonam Udasi
  5. Top 10 holdings: 49.9 percent
  • Invesco India Contra Fund

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  1. Top holding: HDFC Bank, HDFC, Reliance Industries
  2. Assets under management: ₹1,689 crore
  3. The  return after three years: 14.90 percent
  4. Fund Manager: Amit Ganatra, Taher Badshah
  5. Top 10 holdings: 46 percent