Multi Cap Funds: rule-bound diversification

Multi-cap funds are required to hold a minimum 25% each in large, mid and small caps. Unlike flexi-cap (which is free to tilt), multi-cap forces meaningful mid- and small-cap exposure at all times.

• Risk: higher than flexi-cap on average, because of the forced small/mid allocation.
• Use: a disciplined way to always own the whole market.

Good for investors who want guaranteed broad exposure and can stomach the extra volatility. Equity taxation applies.

→ Explore multi-cap funds.