Top 10 Multicap Mutual Funds to Grow Your Portfolio
India is no longer just a hub of tradition and culture it’s fast becoming the birthplace of billion-dollar dreams. In 2021 alone, over 40 Indian startups entered the unicorn club, showing the world that the future belongs to bold innovators. But here’s a thought: If the market is changing, shouldn’t your investment strategy evolve too? Let’s find out how Multicap Mutual Funds can help you ride this dynamic wave in 2025.
What Are Multicap Mutual Funds?
Multicap Mutual Funds are equity funds that invest across all market capitalisations large-cap, mid-cap, and small-cap companies. As per SEBI, a true multicap fund must allocate:
- Large Cap to 25% (Minimum)
- Mid Cap to 25% (Minimum)
- Small Cap to 25% (Minimum)
- 25% Dynamic Allocation (flexible based on market trends)
This makes them “market-cap agnostic,” meaning they don’t restrict investments to any one size or type of company.
Why Choose Multicap Funds in 2025?
Here are the key advantages of Multicap Funds this year:
- Diversified Exposure: In 2025, market volatility isn’t just a buzzword it’s reality. That’s why multi cap funds are a smart choice. By investing across large, mid, and small-cap stocks as well as various sectors, they bring built-in diversification. As a result, your portfolio doesn’t depend on the performance of a single category, reducing overall risk.
- Balanced Growth Potential : Rather than chasing one investment style, multi cap funds balance the best of all worlds:
- Large caps bring stability with their established track records.
Mid caps strike a perfect risk-reward balance, offering solid potential without extreme volatility.
Small caps, though more volatile, offer high growth potential especially attractive for long-term investors.
Together, they form a powerful, well-rounded portfolio. Multicap funds bring all these together in one portfolio.
- Large caps bring stability with their established track records.
- Flexibility and Professional Management: multi cap funds come with professional fund managers who actively manage the 25% flexible allocation. This means your fund dynamically adapts to market shifts, sectoral trends, and economic cycles without requiring you to monitor or rebalance it yourself.
- Capture the Startup Boom: Since 2021, India’s startup ecosystem has been thriving. From fintech to clean energy, emerging companies are showing exponential promise. Multi cap funds allow you to benefit from this growth story without going all in on small caps alone. Instead, your exposure is balanced, giving you access to early-stage winners while still maintaining a stable core.
Top Multi Cap Mutual Funds of 2025
| Funds | Plan Type | 3Yr | SI |
| ICICI Prudential Multicap Fund | Growth | 26.42 | 20.19 |
| Kotak India Growth Fund Series 4 | Growth | 24.54 | 19.3 |
| Nippon India Multi Cap Fund | Growth | 30.58 | 18.21 |
| Motilal Oswal Nifty 500 Index Fund | Growth | 20.65 | 17.55 |
| Mahindra Manulife Multi Cap Fund | Growth | 25.28 | 16.65 |
| Quant Active Fund | Growth | 19.48 | 16.57 |
| Union Focused Fund | Growth | 17.15 | 16.57 |
| Baroda BNP Paribas Multi Cap Fund | Growth | 24.4 | 16.54 |
| Tata Focused Equity Fund | Growth | 20.34 | 16.11 |
| Invesco India Multicap Fund | Growth | 25.07 | 16.04 |
| Sundaram Multi Cap Fund | Growth | 21.93 | 15.54 |
| ITI Multi Cap Fund | Growth | 25.5 | 14.99 |
| SBI Equity Opportunities Fund Series 2 | Growth | 12.32 | 12.12 |
| UTI Multi Cap Fund | Growth | 9.97 | 9.52 |
How Do Multicap Mutual Funds Work?
- The fund manager allocates capital across segments-25% each in large, mid, and small caps, with flexibility in the rest.
- During bull markets, they increase small/mid-cap exposure.
- During market downturns, they lean toward reliable performers.
This dynamic approach helps manage risks while aiming for higher returns.
Who Should Invest in Multicap Mutual Funds?
Multicap funds are ideal for:
- First-time investors who want broad exposure to equity.
- Those who lack time or motivation to pick individual funds.
- Investors with moderate to high-risk appetite.
- Long-term planners aiming for 5+ years of capital appreciation.
Factors to Consider Before Investing
Before you invest in any multicap fund in 2025, consider:
- Your investment goal: Are you saving for wealth creation or short-term needs?
- Time horizon: Multicap funds are best for long-term investors.
- Fund Manager Track Record: Look for consistency in performance across market cycles.
- Risk tolerance: These funds offer moderate risk understand your comfort zone.
Final Thoughts
Since 2021, India has seen a rise in exciting new startups across different sectors from technology to healthcare. These companies are growing fast and have the potential to become tomorrow’s market leaders. However, investing only in small or new companies can be risky.
That’s where multi cap mutual funds come in. They let you enjoy the growth potential of these startups through their small-cap exposure, while also balancing your investment with stable large-cap and promising mid-cap companies. In short, you get the best of all worlds without taking on too much risk.
To explore how you can benefit from this balanced approach, visit Nemi Wealth and start your journey toward smarter investing today.
FAQs
What are the differences between multi-cap, large-cap, and mid-cap funds?
Multi-cap funds invest in companies of all sizes, while large-cap funds invest in large, well-established companies, and mid-cap funds invest in mid-sized companies with growth potential.
How often should I rebalance my portfolio?
The frequency of rebalancing depends on your investment goals and risk tolerance. Some investors rebalance annually, while others may rebalance more frequently.
What are the tax implications of investing in multi-cap funds?
Investing in multi-cap funds can have tax implications, such as capital gains taxes on profits earned from selling fund units. Consult with a tax advisor to understand the tax implications of your investments.
Are there any alternatives to multi-cap funds?
There are several alternatives to multi-cap funds, such as index funds, sector funds, and exchange-traded funds (ETFs). Each option has its own set of risks and benefits, so it is essential to conduct thorough research before investing.
Are multi-cap funds good for beginners?
Multi-cap funds can be suitable for beginners due to their diversification benefits and growth potential. However, beginners should consult with a financial advisor before investing.