Understanding Multicap Mutual Funds

Definition of Multicap Funds

A multi cap fund is a diversified mutual fund scheme that invests the majority of its investible corpus in equity and equity related instruments of publicly listed companies. Of its total assets, a multi cap fund allocates a minimum of 25% each of large cap stocks, mid cap stocks, and small cap stocks. That means 25% of the portfolio is exposed to the small cap market, 25% of the portfolio is exposed to mid cap market and 25% is exposed to large cap markets.

Understanding Multicap Funds

When it comes to other equity funds like large cap funds, mid cap funds, and small cap funds, these funds must adhere to the guidelines that restrict them to dominate their investments in a specific market cap. However, there are no such implications on multi cap funds. For example, if the valuations in large and mid cap markets seem lucrative, a small cap fund cannot take advantage of this situation. That’s because as per market regulator SEBI guidelines, a small cap fund must invest a minimum of 65% of its total assets in small cap stocks. Similarly, if the large cap markets are in turmoil, the fund manager has no option to switch and still has to ensure that the fund maintains maximum exposure to large cap company stocks. In both these scenarios, a multi cap fund might be able to perform and sustain as it can take better investment decisions in such situations, utilizing a Mutual Fund Investment App.

What investors should know before investing in Multicap Funds

Although multi cap funds maintain a minimum exposure of 25% to the large cap markets, they also invest an equal portion in mid and small cap markets. This may be alarming for some investors who do not wish to expose their finances to stocks other than large caps. To benefit from a lucrative environment, multi cap fund managers may even increase exposure to mid cap and small cap markets. Multi cap funds may carry a diversified portfolio that is spread across market caps, but they are prone to volatility and carry very high investment risk. Investors should only invest if their risk appetite allows them to invest in equity mutual funds like multi cap. The multi cap portfolio is constantly exposed to market vagaries and any fluctuations in the market may affect the scheme’s performance in the short run.

Axis Multicap Fund
(An open ended equity scheme investing across large cap, mid cap, small cap stocks)

Investment objective

To generate long term capital appreciation by investing in a diversified portfolio of equity and equity related instruments across market capitalization. However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved.

Benchmark

NIFTY 500 Multicap 50:25:25 Index

Load Structure

Entry Load: Not Applicable

Exit Load: If redeemed / switched-out within 12 months - For 10% of investment: Nil

For remaining investment: 1%
If redeemed/switched out after 12 months from the date of allotment: Nil

Plans and Options

Plans and Options under the Scheme:

Plans Axis Multicap Fund - Regular Plan

Axis Multicap Fund - Direct Plan Direct Plan

Direct Plan is only for investors who purchase /subscribe Units in a Scheme directly with the Fund and is not available for investors who route their investments through a Distributor.
Regular Plan Regular Plan is available for investors who purchase/ subscribe Units in a scheme through a Distributor.

Options under each Plan(s)
Each Plan offers the following options:
• Growth
• Income Distribution cum Capital Withdrawal (IDCW) (Payout and Re-investment Facility)
All the plans will have a common portfolio.

Axis Multicap Fund
(An open ended equity scheme investing across large cap, mid cap, mall cap stocks)

Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.