Multi cap mutual funds are increasingly becoming the investment of choice for both novice and seasoned investors who seek versatility and diversification in their portfolios. These funds are unique because they invest across various market capitalizations, including large-cap, mid-cap, and small-cap companies. This diversified approach helps in creating an optimal risk-return balance.
In this article, we delve into the top 5 multi cap mutual funds generating the best Systematic Investment Plan (SIP) returns, focusing on performance metrics and investment style, specifically in the Indian financial market.
1. Kotak Standard Multicap Fund
Kotak Standard Multicap Fund has been a consistent performer over the years, significantly outpacing many of its peers. The fund aims to generate long-term capital appreciation from a diversified portfolio of equity and equity-related securities. Over a 5-year SIP tenure, this fund has demonstrated robust performance, delivering approximately an 11.45% annualized return. If you had started a monthly SIP of ₹10,000 five years ago, your total investment of ₹6,00,000 would have grown to around ₹8,65,658.
2. SBI Magnum Multicap Fund
Another noteworthy name in the equity funds domain is the SBI Magnum Multicap Fund. This fund’s strategy involves a dynamic mix of large-cap, mid-cap, and small-cap stocks. Historically, it has provided attractive dividends and capital gains. For a 5-year SIP tenure, the fund has provided an annualized return of about 10.92%. Assuming a monthly SIP of ₹10,000, your total invested amount of ₹6,00,000 would have grown to around ₹8,26,962.
3. HDFC Equity Fund
HDFC Equity Fund is known for its robust stock selection strategy and superior risk management techniques. This multi cap fund focuses on stocks with strong fundamentals, ensuring long-term value creation. For investors who committed to a 5-year SIP of ₹10,000 per month, their total investment of ₹6,00,000 would have appreciated to approximately ₹8,77,219, reflecting an annualized return of around 12%.
4. ICICI Prudential Multicap Fund
ICICI Prudential Multicap Fund is another powerhouse in the multi cap investment space. This fund has shown a consistent performance, balancing its investments across different market capitalization segments. Over a 5-year SIP duration, it has generated annualized returns of about 11.70%. Therefore, a total SIP investment of ₹6,00,000 (via ₹10,000 per month) would have swelled to approximately ₹8,68,290.
5. Motilal Oswal Multicap 35 Fund
Last but not least, the Motilal Oswal Multicap 35 Fund stands out due to its focused investment approach, usually maintaining a compact portfolio of 35 stocks across various market caps. This focused strategy has led to significant returns, with a 5-year SIP annualized return of about 10.58%. Hence, a monthly SIP of ₹10,000 over the last five years would have transformed a ₹6,00,000 investment into approximately ₹8,19,491.
Factors Driving SIP Returns
While past performance is a significant indicator, it’s crucial to consider the underlying factors that drive SIP returns in multi cap mutual funds:
- Diverse Allocation: These funds balance risk by investing across large, mid, and small-cap segments.
- Fund Management: The expertise and strategy of the fund manager play a crucial role in stock selection and investment timing.
- Market Conditions: Economic growth, corporate earnings, and market sentiment significantly impact the performance of equity funds.
- Flexibility: The ability to switch investment ratios between different market caps helps the fund adapt to market shifts.
Disclaimer
Investing in multi cap mutual funds involves risks, including the potential loss of capital. Past performance is not indicative of future results. Investors must consider their risk tolerance, investment horizon, and financial goals before investing. Consulting with a certified financial advisor can help in making informed decisions. The data provided herein is based on historical performance and should not be the sole factor for making investment decisions.
Summary: Top 5 Multi Cap Mutual Funds With The Best SIP Return
Multi cap mutual funds, encompassing investments across large-cap, mid-cap, and small-cap companies, have proven to be a lucrative choice for investors aiming for diversified exposure. Kotak Standard Multicap Fund leads the pack with an impressive annualized SIP return of 11.45%, implying a significant growth from a modest monthly investment. SBI Magnum Multicap Fund and HDFC Equity Fund follow closely, showcasing robust annualized returns of 10.92% and 12% respectively, translating to substantial capital appreciation. ICICI Prudential Multicap Fund also makes a strong case with its 11.70% annualized return, while Motilal Oswal Multicap 35 Fund impresses with a 10.58% return.
These returns underscore the importance of a diversified investment strategy in navigating market volatilities. However, past performance should not be the sole criterion for investment decisions. Potential investors need to gauge their risk tolerance, seek professional advice, and conduct thorough research before venturing into the Indian financial market.
