What Are Multi-Cap Funds, How Do They Benefit You?

Demystifying Multi-Cap Funds These funds invest in stocks from across market capitalisations. These funds need to have an investment of at least 75 per cent of their portfolio in equities and equity-related investments at any point of time. The mandate says that a minimum of 25 per cent each must be invested into large-cap, mid-cap and small-cap stocks. The balance 25 per cent can be invested as per the discretion of the fund manager. An investor can achieve diversification within equities by investing in these funds, and wouldn’t have to keep an eye on the market in terms of which category of stocks is performing at that particular time. The large-cap portion in multi-cap funds gives stability to your portfolio, while the small-cap portion gives you the opportunity to generate an alpha. An investor who is mature, has a long-term horizon of three to five years and who is looking...