Multi Cap Funds Compare

Additional Useful Information

• An investor can buy “Units” of these mutual funds. These units can be purchased at a price which is called the “Net Asset Value or NAV”. The NAV of these funds keeps changing daily depending upon the changes in the stock prices of the companies that are held by them.

• The investor can sell these units anytime at the NAV price prevailing on the day of the sale.

• Total Purchase Amount	=	Number of Units X NAV as on the day of purchase
  Total Sale Amount	=	Number of Units X NAV as on the day of sale
  Total Gain	=	Total Sale Amount – Total Purchase Amount

• The fund house which issues a Multi Cap Mutual Fund may offer two options to select from –
• IDCW Option – In this option, growth in the mutual fund value is distributed back to the investor’s bank account in the form of periodic payouts called “Dividends”. This payout could be monthly or quarterly.
• Growth Option – In this option, growth in the mutual fund value is invested back in the fund for further growth. The investor’s gains are in the form of higher NAV price of the units of the fund.

• If an investor buys units in a Multi Cap Mutual Fund and sells them within a certain short period of time, then the fund house may charge the investor, certain nominal fees, at the time of the sale. These charges are the “Exit Load”. This period of time is typically less than 1 year but varies from fund to fund. Typical exit loads can vary from 0 to 1% of the sale amount.

• Multi Cap Mutual Funds are considered a good investment option over the long term (more than 5 years).

Returns *

• Multi Cap Mutual Funds do not guarantee any returns. They are subject to market risks.

• If Multi Cap Mutual Funds are held over a 7-year period, they could generate returns ranging from 18.5% to 25% per year.

Risk Level

• Flexi Cap Mutual Funds are categorized as high-risk investments since they invest in the equity stock market.

Liquidity

• When an investor sells (or redeems) units of these funds, the fund house will pay the sale amount to the investor in 2 working days (T+2).

Interesting Facts

• Multi Cap Funds invest a minimum of 75% of its total investable amount in equity.

• Multi Cap Mutual Funds are known for their diversification benefits. This may result in potentially steady returns or a lower downside during weak markets. Since the fund is free to invest in any sector or in a company of any size, it can make the most of new opportunities across the market.

• Unlike flexi cap funds, multi cap funds have a restriction as to how much of the fund corpus should be allocated to small, mid, and large cap stocks. The asset allocation must be equal to all 3 sizes at a minimum of 25% to each. This is where constraints are faced by the fund manager, and they may not always be able to make the most of new opportunities in the market.

Tax Implications

• Earnings received from Multi Cap Mutual Funds are taxable.

• When investors sell their Multi Cap Mutual Fund units, the difference between the Sale Amount and Purchase Amount is typically called “Capital Gain” or “Capital Loss” (if sale amount is lesser than the purchase amount).

• The tax that the investor must pay on Capital Gain is –
• Situation 1 – If the Multi Cap Mutual Funds are sold within a period of 2 years from investment, the Capital Gains earned (called Short Term Capital Gains) are taxed at 20% of the gain.
• Situation 2 - If the Multi Cap Mutual Funds are sold after a period of 2 years from investment, the Capital Gains earned (called Long Term Capital Gains) are taxed at 12.5% of the gain.

• There is no tax in case of “Capital Loss”.

• For any dividends/payouts received by investors from Multi Cap Mutual Funds, these amounts are added to their total taxable income and tax is required to be paid as per the tax slab.

Where To Invest

• https://www.5paisa.com/mutual-funds/multi-cap-funds/

• https://groww.in/mutual-funds/category/best-multi-cap-mutual-funds

• https://www.etmoney.com/mutual-funds/equity/multi-cap/34