Contents
- Overview on the best multicap fund
- Eligibility for investing in the best multicap fund
- 5 things to consider before investing in the best multicap fund
- Objectives
- Risk
- Cost
- Investment horizon
- Financial goals
- How you can evaluate the best Multicap fund?
- Returns
- Fund history
- Expense ratio
- Financial ratio
- 9 Best multicap fund
Overview on the best multicap fund
The best multicap fund invests in a multitude of funds instead of just one. It could be a small-cap, mid-cap or large cap. In comparison to pure small-cap or mid-cap funds, these funds are less risky and are therefore better to investors who are less aggressive about the returns. The investment of these funds is across capitalization and sectors and thus pick the stocks to invest in. In addition to picking these stocks, the fund manager keeps shifting the fund allocation among different caps to suit the needs of the investor.
Investment is biased towards large-cap while the allocation of funds is reduced by a small margin in mid-cap funds. These funds are invested during bull runs, which is why they bring stupendous returns. Sometimes these returns outperform pure large-cap or mid-cap funds.
Eligibility for investing in the best multicap fund
The investors who don’t want to go into the trouble of picking up stocks or deciding which capitalization fund would suit them could go for the best multicap mutual funds. After investing in for a period of time, they could go for pure cap funds.
When it comes to hedging the risk, the mixture of both of these funds balances out the volatility and risk very well. So, if you want to invest in a moderate-risk portfolio, these investments are right for you.
5 things to consider before investing in the best multicap fund
Objectives
The funds are allocated in the schemes that offer high risk, return, and value. And the style of the investment could be either value investing or growth investing. Other quantitative measures like P/E ratio, EPS, Enterprise value may be considered to ensure that the investments are only in quality stocks.
Risk
Multi-cap funds also face market risk, wherein the rise & fall of the index may lead to fluctuation in the fund value. These fluctuations are higher than in the large-cap or mid-cap funds. And thus, the fund manager is skilled enough to take benefit of these fluctuations to generate huge profits.
Cost
The fund manager charges an expense ratio of 1.05% to manage your funds. As these funds are actively managed, there is a higher transaction cost associated with it and a higher turnover ratio. Also, due to higher gains made by investing in these funds, these costs are compensated.
Investment horizon
An investor should have a short-term/long-term investment goal to be interested in this scheme. Understand what are the Best performing short term mutual funds in the market. The ELSS (Equity Linked Social Scheme) invests money in diversified funds & the lock-in period is 3 years.
Know what are the tax benefits of ELSS.
Funds experience a lot of fluctuations in the short-run but it averages out in the long-run. So, an investor should be interested in the investments for a long period of time.
Also, study what are the best ELSS funds to invest in 2019.
Financial goals
The main aim of these funds is to create large enough wealth for future circumstances. It could be your children’s higher goal or retirement planning. It, being a high-risk high-return investment option, these funds can generate enough wealth for you to retire early and follow your passion in life.
How you can evaluate the best Multicap fund?
Returns
The fund’s returns should be considered for at least a period of 5-10 years before investing in any multi-cap funds. An individual can select the funds that have clearly beaten their benchmark indices.
Fund history
You can also check the history of the funds. The fluctuations in the market and the fund manager dealt with it. A good 5 years would be enough to tell you about the performance of the same.
Expense ratio
It is the expense incurred annually by the funds expressed in the percentage of their average net asset. This is the charge that is paid by the investor to the fund manager to manage the funds. The expense ratio of direct mutual funds is lower than the regular mutual funds. Essentially, you should choose the best multicap mutual fund investment with a low expense ratio.
Financial ratio
Fund manager uses various ratios which in turn evaluates the performance of the funds. The Sharpe ratio is such an example. Sharpe ratio indicates the risk-adjusted return. This shows the excess returns given by the fund over the return given by a risk-free instrument. In other words, the higher the financial ratio, the better is the performance of the firm.
9 Best multicap fund
| Fund name | 1 year | 3 year | 5 year | Expense ratio | Turnover ratio | Category | Risk |
|---|---|---|---|---|---|---|---|
| SBIMF Magnum multi-cap fund | 7.81% | 15.11% | 17.86% | 1.14% | 65% | Equity (multi-cap) | Moderately high |
| Kotak Standard MF multi-cap fund | 12.51% | 17.68% | 18.04% | 0.73% | 14% | Equity (multi-cap) | Moderately high |
| Aditya Birla Sun life MF equity fund | 4.86% | 15.61% | 15.27% | 1.03% | 32% | Equity (multi-cap) | Moderately high |
| Mirae Asset Large cap fund | 12.54% | 17.47% | 17.26% | 0.65% | 14% | Equity (large-cap) | Moderately high |
| Axis Focussed 25 Fund | 4.52% | 18.32% | 17.30% | 0.50% | 60% | Equity (focussed) | Moderately high |
| ICICI Prudential Multi-cap fund | 10.51% | 15.19% | 15.03% | 1.26% | 152% | Equity (multi-cap) | Moderately high |
| Axis Multi-cap fund | 11.22% | NA | NA | 0.48% | NA | Equity (multi-cap) | Moderately high |
| Motilal Oswal Multicap 35 fund | 1.47% | 15.71% | 20.88% | 0.78% | 40% | Equity (multi-cap) | Moderately high |
| Franklin India Prima Plus | 4.01% | 10.65% | 14.67% | 0.91% | 13% | Equity (multi-cap) | Moderately high |
Use our services, if you wish to invest in equity mutual funds, multi-cap mutual funds, debt mutual funds or small-cap funds. For more information, visit our website WealthBucket or call us at +91 9999379929. You can also email us at contact@wealthbucket.in
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