MULTI CAP FUNDS - A MULTI-CUISINE BUFFET

To qualify as a genuine all-rounder in cricket, one must not only be able to bat and bowl well but also field well.

- ASHOK KUMAR

Kapil Dev and Ravindra Jadeja are two Indian cricketers who fit this description well. Multi-Cap funds are similar. As its title suggests, they are equity mutual funds that do not focus on a particular capitalisation category of companies but invest across multiple sectors and capitalisations. This makes them more diverse, providing balanced exposure when compared to other traditional equity mutual fund schemes like Large or Mid-Cap or Small-Cap funds.

In September 2020, the Securities and Exchange Board of India (SEBI) revised its earlier norms and asked the fund houses to invest a minimum of 25% each in large-cap, mid-cap, and small-cap stocks in their respective multi-cap schemes. The remaining portion that the fund has can be invested across market-caps or in debt and money market instruments.