How Multi-cap fund works
Its category rules constrain the size allocation more than a flexi-cap mandate. Rebalancing to maintain those bands can affect turnover, and the permanent mid- and small-cap exposure can increase volatility.
An example
A multi-cap portfolio cannot simply move almost entirely to large companies during stress if the category's minimum allocation rules still apply.
Why it matters for your family
Use it when the family deliberately wants all three size bands through a single fund, not because the word multi sounds automatically diversified.
Questions people ask
- What does Multi-cap fund mean?
- A multi-cap fund is an equity mutual-fund category required to maintain meaningful exposure across large-, mid- and small-cap company bands.
- Why does Multi-cap fund matter for a family?
- Use it when the family deliberately wants all three size bands through a single fund, not because the word multi sounds automatically diversified.
- Where can I verify information about Multi-cap fund?
- Start with AMFI Investor Corner, linked on this page, and the current official document for the product or tax year involved.