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  • Best multi-cap mutual funds
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Best Multi Cap Mutual Funds in India

Top multi-cap mutual funds for long-term wealth creation and risk-balanced returns

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Multi-cap mutual funds are diversified equity mutual funds that invest in companies across different market capitalisations, that is large-cap, mid-cap, and small-cap stocks. These funds are spread investments across different sectors and company sizes so as to achieve an optimum mix of growth, value, and stability for investors. This article provides information about the best multi-cap mutual funds, things to consider before investing in these funds, and factors that influence the performance of this category.

Best multi-cap mutual funds

Multi-cap funds provide diversification by way of investing in an array of sectors and companies in terms of size. That is why it is also known as a reliable choice for investors interested in long-term returns:
 

1. Versatile portfolio allocation

Unlike equity funds, which are limited to certain segments of the market, capitalisation constraints do not apply for multi-cap funds which enables them to allocate assets across large, midcap, or small-cap stocks. This agility provides fund managers the power to react to market conditions more effectively, with a view to maximizing growth.
 

2. Balanced risk and reward

The funds invest across large, mid, and small companies, which allows them to deliver a balanced risk-reward profile. Though large-cap stocks give stability, mid-cap, and small-cap ones can churn out immense growth over years.
 

3. Long-term wealth creation

The ideal time horizon for an investor considering multi-cap mutual funds could be long-term as the fund has the opportunity to invest in growth and value stocks that can help him build a significant corpus over the years.

Key takeaways

  • Multi-cap mutual funds invest in large, mid, and small-cap companies to provide a combination of stability and growth.

  • These funds allocate their assets based on market conditions and are hence flexible.

  • Intended for long-term investors seeking capital preservation and balance of returns.

  • It is of paramount importance that you evaluate the expertise of the fund manager, and get to know about the historical performance of the fund to succeed.

  • Choose funds with a low expense ratio to increase your return.

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Factors to consider before investing in multi-cap funds

While multi-caps offer diversification, evaluate them with care:
 

1. Fund manager’s expertise:

Efficient multi-cap funds can be attributed to the flexibility of the manager in altering asset allocation according to market trends.
 

2. Expense ratio:

Expense Ratio also determines the net return it will offer so this becomes an important factor when you are selecting the best multi-cap mutual funds.
 

3. Past performance:

Though historical returns are not indicative of the future, they help to gain a sense of the reliability with which a fund operates through markets in various phases of an economy.

Conclusion

Multi-cap mutual funds provide a flexible and diversified investment avenue to create wealth over the long term. Since they have the ability to invest across market capitalisations, they provide access to stability with a touch of growth. While it is not easy to pick the right multi-cap fund, an investor must look into a few things such as the quality of the fund manager, expense ratio, and past performance. The Bajaj Finance mutual fund platform further serves as your gateway to access all content that would give necessary insights and resources on how to pick the top multi-cap mutual funds. You can select from a long list and various categories of mutual fund schemes and resources that make investing in mutual funds easy and hassle-free.

Types of Mutual Funds

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Frequently asked questions

What are multi-cap mutual funds?

Multi-cap mutual funds are equity funds that invest in large-cap, mid-cap, and small-cap stocks thereby offering diversified exposure across sectors as well as market sizes.

Why should I invest in multi-cap mutual funds?

They offer a good risk-return balance by investing in various market capitalisations, hence are suitable for long-term wealth creation.

Are multi-cap funds riskier than large-cap funds?

Multi-cap funds carry more risk than large-cap funds as they also invest in mid and small-cap stocks, which are relatively higher volatile. However, the upside is that they provide you with a better chance of growth.

How long should I invest in a multi-cap fund?

Multi-cap funds are generally recommended to investors with a long-term horizon of investment, which is ideally 5 years or more years as it can achieve potential growth and does not get affected by short-term market volatility.

Can I invest in multi-cap funds for short-term goals?

Multi-cap funds are oriented funds designed for long-term goals. Ordinarily, short-term investments will be more impacted by ups and downs in the market.

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Disclaimer

Bajaj Finance Limited (“BFL”) is an NBFC offering loans, deposits and third-party wealth management products.

The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed.

This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.

Disclaimer

Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as 'Mutual Funds) with ARN No. 90319

BFL does NOT:

(i) provide investment advisory services in any manner or form.

(ii) carry customized/personalized suitability assessment.

(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.

In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other/better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.

Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.

Disclaimer on Risk-O-Meter:

Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc, and shall also consult their Professional advisors, if they are unsure about the suitability of the scheme before investing.


Disclosure
: Bajaj Finance Limited (BFL) is a distributor of Mutual Funds with ARN - 90319 and distributes mutual funds of Bajaj Finance Asset Management Limited (BFSAMC). BFL receives commission towards distribution of mutual fund products. BFSAMC is a group company of BFL, carrying business on arm’s length basis without any conflict of interest and in accordance with the prevailing law / regulation.

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