Best Multicap Mutual Fund

What Are Multi Cap Funds?

Multi cap funds are mutual funds that invest across all market capitalizations. As per the latest guidelines by the Securities and Exchange Board of India (SEBI), multi-cap funds should invest a minimum of 25% in equity and equity-related securities of large-cap companies, 25% in equity and equity-related securities of mid-cap companies and 25% in equity and equity-related securities of small-cap companies.

Features of Multicap Mutual Funds

Multicap mutual funds offer the following features:

• Diversified asset allocation: Multi cap funds invest in small, mid, and large-cap companies and offer a diversified investment portfolio.
• Varying risk-to-return ratio: Multi cap funds alter their asset allocation according to the prevailing market conditions. As a result, the risk-to-return ratio may vary depending on the assets at a given time.
• High flexibility: Multicap mutual funds are highly flexible and offer the fund manager enough room to modify the fund’s portfolio per the prevailing performance of the market. The fund manager can change the asset allocation within SEBI’s guidelines anytime to tap into emerging market opportunities. In fact, this is one of the reasons why the expertise and experience of the fund manager play a critical role in the investment success of these funds.
  
  

Taxability on Multi Cap Funds

Multicap mutual funds are taxed as equity funds and levied short and long-term capital gains tax. Here’s how these are imposed:
 

• Long-term capital gains tax is imposed when the fund has been held for a year or more. In this case, investors pay a tax rate of 10% on gains exceeding Rs 1 lakh in a financial year.
• Short-term capital gains tax is imposed when the fund has been held for less than a year. In this case, investors pay tax at the rate of 15%.

Advantages Of Investing In Multicap Mutual Funds

The top multi-cap funds can offer the following benefits:

• Market coverage: Multi cap funds are suitably diversified to ensure that your money is invested across all market capitalizations. You get to invest in big, small, and medium-sized companies and be a part of their growth. You get the best of all and create wealth for yourself over time at a steady pace.  

   

• Low risk: The primary purpose of diversification is to reduce risk. Multi cap funds invest in different types of companies and sectors based on market capitalization to ensure that you are not exposed to too much volatility and risk.

   

• Optimal returns: A suitable asset allocation is maintained throughout the investment term to ensure that your returns are maximized and the risk is minimized based on the prevailing market conditions.

   

• Liquid: Liquidity is one of the best multicap fund features. You can buy and sell your units anytime. Like all mutual funds, you can invest in a lump sum or through a Systematic Investment Plan (SIPs). The redemption is also instant.

Who Should Invest in Multi Cap Mutual Funds?

Multi cap funds are suited for investors who are looking for diversification within the same fund. If you are new to investing or lack time to diversify your investments, investing in a multi-cap fund can be suitable, as the fund manager does this on your behalf. You can also invest in multi cap funds if you cannot decide which type of companies you should be investing in. Since these funds invest in all market capitalizations, your money is exposed to all types of companies.

How to start investing in multi cap funds

Here are the steps to invest in multi cap funds: 

• • Download the Moneyfy App

    • Create your profile

      • Browse through the list of top multicap funds and select the ones you like

      • Select an SIP or a one-time lump sum investment

        • Complete the payment