A multi-cap mutual fund is a fund investing in large-cap, mid-cap small-cap stocks. For equity investors with moderate risk appetite, multi-cap mutual fund schemes recommended. The plans include various market capitalizations and investments in industries, giving fund managers the ability to switching to sectors and stocks. The shift, however, focuses on the market conditions and expectations of the sectors. Multicap mutual fund schemes can also invest in mid and small-cap stocks; this performance provides opportunities for higher returns.

This diversification and rebalancing cross-market cap is possible with multi-cap mutual funds at a lower cost than in a situation where you had to switch between significant, mid-and-small-cap mutual funds on your own. It is mainly because, with each turn, the latter option may enter exit load and capital gains taxes, where it does not occur when changes a multi-cap fund portfolio.

List of top 5 multi-cap mutual funds

Franklin India Focused Equity Fund
Franklin India Focused Equity Fund is a relatively aggressive multi-cap mutual funds scheme that has invested more than half of its assets in consumer-driven industries. It is an acceptable scheme to gain an appreciation of capital.

Kotak Standard Multi-cap Fund

The scheme has taken an aggressive place in allocating its assets across sectors as it has invested most of its capital in cyclical rather than protective sectors. It is a useful scheme for investors who appreciate long-term assets by engaging in a concentrated portfolio of equities.

Axis Focused 25 Funds

With its impressive performance, the scheme still managed to secure a spot in the list of the best five multi-cap funds. 3-year, as well as 5-year cycles, has improved their benchmarks. A focused approach is compatible with a scheme that invests in only 22 stocks. It is a reasonably aggressive fund based on cyclical sectors, especially financial services, as it is highly bullish. It is a real long-term investment option for capital appreciation.

Reliance Focused Equity Fund

The scheme has shown excellent long-term success over five years in which it has achieved better returns than its benchmark. It is a relatively aggressive multi-cap fund, which given more weight to cyclical sectors in its portfolio than defensive sectors. It is a suitable pick for investors with moderate-high risk appetite and is looking for a scheme that invests in high-quality companies with an optimal mix of growth and value.

SBI Focused Equity Fund

The scheme was launched about 15 years ago on September 2004. In the last five years, the scheme has surpassed its benchmark by a margin of 4 percent. The scheme follows a relatively conservative approach when it comes to asset allocation through capitalization because it has invested most of its assets in large-cap stocks that are fundamentally strong.

Note: Such schemes generally recommended for equity investors with a moderate risk appetite, who switch to multi-cap mutual fund schemes.

Multi-cap funds are diversified equity funds that invest in different proportions of company shares through market capitalization to maximize investment returns.