Multi-cap Mutual Funds

Independent of the market cycle, investing in a multi-cap fund enables you to access all market segments. The fund's large-cap segment offers stability at a relatively moderate risk. The small-cap element typically improves portfolio performance over the long-term, while the mid-cap offers a combination of growth and stability. For long-term investors looking to accumulate wealth and achieve their financial objectives with a potentially better risk-return trade off, multi-cap fund offers a strong case. These investors should have an optimal investing horizon of roughly five years to get a fair taste of the market.

Multi-cap funds outperform large and mid-cap funds in terms of diversification by investing in more stocks. However, large and mid-cap funds can include higher-quality equities than their multi-cap equivalents, meaning that investors in the former will see better returns.

While a flexi-cap fund is a form of equity fund that covers stocks from multiple sectors and market capitalisation, a multi-cap fund invests in diverse market-cap businesses that include large-cap, mid-cap, and small-cap stocks but they mostly invest in large-size stocks making it less hazardous.

Use the Bajaj Finance SIP calculator to get an approximate understanding of the kind of returns you might expect from these funds before making a decision.

Multi-cap Funds are required to allocate at least 65% of their assets to stocks, adhering to regulatory guidelines. This allows fund managers the flexibility to create a diverse portfolio across various sectors and company sizes, with adjustments made based on market dynamics.    

Multi Cap Mutual Funds, investing in equities, may exhibit short-term volatility, but their risk tends to decrease over the long term as market fluctuations stabilize.

Flexi Cap Funds, with a versatile investment approach, offer the advantage of selecting stocks from any sector, providing exposure to the market's best opportunities. Additionally, fund managers can adapt the portfolio mix to optimise returns based on prevailing market conditions. With these benefits and the inherent diversification, Flexi Cap Funds are a valuable addition to any investor's portfolio.

Flexi-cap funds offer more flexibility in choosing stocks, making them suitable for dynamic market conditions, while multi-cap funds diversify across market caps.

Multi-cap funds have the potential to offer attractive returns over the long term, depending on market conditions and the fund's performance.

It is advisable to stay invested in multi-cap mutual funds for the long term to benefit from compounding and navigate market fluctuations effectively.

Multi-cap funds provide diversification across market segments, enabling investors to benefit from various opportunities and mitigate risks in their portfolios.

Investors should consider factors like fund performance, expense ratio, fund manager's track record, investment objective, and risk profile before selecting a multi-cap mutual fund.

No, multi-cap mutual funds typically do not have a lock-in period, offering investors flexibility in terms of liquidity.

Multicap funds can be actively managed, passively managed (index funds), or thematic, focusing on specific sectors or themes.

Long-term capital gains (holding period over 1 year) are taxed at 10% for gains exceeding Rs. 1 lakh annually, while short-term gains (holding period less than 1 year) are taxed at 15% as per current tax regulations.