Multi Cap Fund — What It Is, Who Should Invest & Best Funds

SEBI definition: Invests at least 75% in equities with a minimum of 25% each in large, mid and small cap stocks.

Who should invest

Investors who want guaranteed diversification across all market cap segments in a single fund.

Risk level	High
Suggested horizon	7+ years
Historical returns	13–17% CAGR historically
Taxation	Equity taxation: LTCW at 12.5% after ₹1.25L; STCG at 20%.

Advantages

• Guaranteed exposure to all cap segments
• SEBI-mandated diversification — manager cannot avoid mid/small cap
• Good for hands-off investors

Drawbacks

• Mandatory 25% small cap can hurt in bear markets
• Less flexibility than flexi cap

Frequently asked questions

Is multi cap better than flexi cap?

Neither is universally better. Multi cap guarantees small and mid cap exposure (better diversification); flexi cap gives the manager more control to shift to large caps in downturns. Flexi cap tends to be less volatile; multi cap has higher small cap exposure.

Related categories

• Flexi Cap Fund
• Mid Cap Fund
• Small Cap Fund

See the best Multi Cap Funds ranked by data, or filter every scheme in the fund screener. Historical returns describe the past only — mutual fund investments are subject to market risks.