Best Multicap Mutual Funds to Invest in 2019

Here’s the list of the best multicap mutual funds to invest in 2019 –

  1. Mirae Asset India Equity Fund
  2. Kotak Standard Multicap Fund
  3. Reliance Multicap Fund
  4. Aditya Birla SL Equity Fund

Here are the parameter scores of the above funds according to Finpeg CRAFT Framework…

best multicap mutual funds

To understand the parameters in detail, please refer to Finpeg CRAFT Framework

You can refer to the following pointers to understand what each of these parameters mean in short…

    • Long-term Percentile Rank
      This is average percentile rank of the fund since Jan 2004 based on 3-year return. This is a measure of a fund’s performance with respect to its peers. Lower the rank, better the performance.
    • Top25 Percentage
      This is the percentage to capture the number of times the fund was in top 25% since Jan 2004. This is a measure of consistency of performance of a fund. Higher the percentage, better the consistency.
    • Downside Deviation
      A variant of standard deviation. It only captures deviation below the average return. This captures the risk associated with the fund. Lower the deviation, lower is the risk.
    • Near-term Percentile Rank
      Average percentile rank of the fund in last 1 year based on 1-year return. This is a measure of a fund’s recent performance with respect to its peers. Lower the rank, better the performance.
    • Average Return in 2008-09
      Average 1-year return delivered by the fund during the crash of 2008-09. This captures the performance of the fund during times of stress.

Why Mirae Asset India Equity is the Best Multicap Mutual Fund in 2019

It is important to note that the multi cap category itself has shrunk in size after SEBI’s re-categorization of schemes. Under the new categories, a lot of erstwhile multicap funds have now moved to Value and Focused categories.

In our rankings, we treat these as 3 separate categories as this is how it will be going forward. The funds have now a changed mandate. Hence its pertinent to find out the best funds in each category rather than merge them into one single category.

If you have gone through the Finpeg CRAFT Framework, you would immediately be able to tell that Mirae Asset India Equity is easily the best multi cap fund as of today.

It has the best performance relative to peers– indicated by long-term percentile rank (lower the better) and top25 percentage (higher the better). It also has the lowest risk associated as indicated by downside deviation (lower the better). Finally, the recent performance of this fund has been absolutely amazing as indicated by the near-term percentile rank (lower the better).

Kotak Standard Multicap Fund takes the second spot in this list due to its continued consistent performance – except the last one year or so. However, the AUM of this fund is a concern – it is twice that of all other funds on the list.

The other two funds – Reliance Multicap Fund and Aditya Birla SL Equity Fund – are not bad but clearly lag when compared to the funds already discussed – Mirae Asset India Equity Fund and Kotak Standard Multicap Fund.

What are Multicap Mutual Funds

Multicap mutual funds is a popular category of equity mutual funds.

sebi recategorization equity mutual funds

As the name suggests, a multicap mutual fund invests the money it receives from investors in companies irrespective of the company size.

In short, a multicap mutual fund can invest in a mix of large cap, mid cap and small cap companies without restrictions. Meaning, there is no restriction on the exposure it takes to any of these categories.

This makes multicap mutual funds extremely flexible compared to other equity mutual fund categories. A good fund manger will try to use this flexibility to manoeuvre across different market caps.

In a bullish market, a good multicap fund manager will have increased exposure to mid cap and small cap companies. This is because mid cap and small cap companies tend to outperform large cap companies in good market conditions.

In a bearish market, the multicap fund manager will have maximum exposure to large cap companies. This is because large cap companies are hurt less in bad market conditions.

Who Should Invest in Multi Cap Mutual Funds

Multi cap mutual funds provide a great option for new mutual fund investors.

Investing in a multi cap mutual fund reduces investor effort of deciding his allocation to large, mid and small caps. This is because this decision is taken by the fund manager basis the prevalent market conditions as we saw.

A new investor can select one or two good multi cap mutual funds to get started. As one gains experience and starts learning about his risk appetite and preferences, one can start deciding his allocation to different caps. But until then, a good multicap fund is the best bet of a new mutual fund investor.

What are expected returns of Multi Cap Mutual Funds

For the best multi cap mutual funds according to Finpeg, the following are the 3-year and 5-year rolling return and standard deviation.

best multicap mutual funds

Note – NAV considered is of regular and growth options of the funds and for the period 1st Jan 2010 to 31st Dec 2018

So, you can expect a return in the range of 15-18% provided that you select the best multi cap mutual funds to invest and stay invested for 3-5 years.

To know what are the best mutual funds in other categories like large cap and mid cap, visit this page.

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