Mutual funds are a type of investment vehicle that help people to invest their money in stocks, bonds, and other securities without having to worry about them individually. These funds are being used more commonly these days due to their versatile nature and also the fact that when compared to typical investing instruments, they deliver higher returns.
Today, multi-cap mutual funds are among the highly preferred mutual fund schemes. So, this article will go over the best multi-cap mutual fund for 2022.
What exactly are Multi-cap Mutual Funds?
Investors are often confused about how to invest in mutual funds. While large-cap funds give greater portfolio consistency, mid-cap & small-cap funds generate extraordinary returns. Sector-specific funds can boost profits if a specific industry is performing especially well. Nonetheless, one fund kind shines among the others due to its great versatility: multi-cap.
Multi-cap mutual funds can be defined as diversified equity mutual funds that engage in stocks of firms with varying market capitalisations. These investments are made in varied quantities to fulfil the fund’s investing goal.
Investing in Multiple-cap Mutual Fund
A multi-cap mutual fund invests in a variety of market capitalisations, the fund manager’s perspective is crucial in deciding the fund’s success. Before investing, it is best to research the mutual fund manager’s track history as well as the mutual fund’s long-term performance using metrics such as 3-year and 5-year average annualised returns, unpredictability, and portfolio composition.
It is also necessary to examine the portfolio in which this mutual fund has invested over its duration. Because multi-cap mutual funds are not restricted to engaging in any single market, it is critical for the investor to dig into sectorial patterns, as there may be certain sectors that one does not want to engage in, so you may dig down to the number of details and decide appropriately.
Top-Performing Multi-cap Mutual Funds
- Parag Parikh Flexi Cap Fund:
Highlights:
- Parag Parikh Flexi Cap Fund has a 1-year return of 28.07%. Since its inception, the Parag Parikh Flexi Cap Scheme has generated an average yearly return of 20.79%. Every two years, the fund has almost doubled the amount invested in it.
- The capacity of the Parag Parikh Flexi Cap Fund plan to provide consistent returns is in-par with other funds in its category. It has an above-average capacity to minimise losses in a sinking market.
- The bulk of the Parag Parikh Flexi Cap Scheme’s assets is invested in the finance, services, tech, consumer goods, and automobile industries. In comparison to other mutual funds in its category, it has acquired less exposure in the finance and services fields.
- The top five holdings of the Parag Parikh Flexi Cap Scheme are Alphabet Incorporated Class A, ITC Limited, Bajaj Holdings and Investment Limited, Microsoft Corporation (US), and Amazon Incorporated (USA).
- Quant Active Fund:
Highlights:
Quant Active Fund has a 1-year return of 42.26%. Since its inception, the Quant Active Scheme has generated an average yearly return of 22.11%. Every two years, the fund has almost doubled the amount invested in it.
The capacity of the Quant Active Fund plan to provide consistent returns is greater than that of other funds in its category. It has an above-average capacity to minimise losses in a sinking market.
The bulk of the Quant Active Scheme’s assets is invested in services, metals and mining, consumer goods, construction, and finance. In comparison to other mutual funds in its category, it has acquired less exposure in the services and metals & mining fields.
The top five holdings of the Quant Active Scheme are Vedanta Limited, ITC Limited, SBI, Linde India Limited, and Larsen & Toubro Limited.
- PGIM India Flexi Cap Fund:
Highlights:
PGIM India Flexi Cap Fund has a 1-year return of 26.65%. Since its inception, the PGIM India Flexi Cap Scheme has generated an average yearly return of 16.33%. Every two years, the fund has almost doubled the amount invested in it.
The capacity of the PGIM India Flexi Cap plan to provide consistent returns is greater than that of other funds in its category. It has an above-average capacity to minimise losses in a sinking market.
The bulk of the PGIM India Flexi Cap Scheme’s assets is invested in finance, technology, capital products, chemicals, and materials. In comparison to other mutual funds in its category, it has acquired less exposure in the finance and tech fields.
The top five holdings of the PGIM India Flexi Cap Scheme are Infosys Limited, HDFC Bank Limited, ICICI Bank Limited, Mphasis Limited, and Bajaj Finance Limited.
Conclusion:
In the end, multi-cap funds offer a unique combination of the best features from both large-cap and mid/small-cap funds. Because of this, many investors who want to add diversity to their portfolios can be an ideal choice. Multi-cap funds are also a good option for those who have a lower appetite for risk and want to invest in many companies at once, instead of just one that drastically increases the chances of total asset loss.