2 most consistent multi-cap funds right now

Summary: A three-year return chart can flatter a fund that had one great year. Consistency is harder to find and rarer to sustain. Two multi-cap funds passed that test. Here's what set them apart.

Multi-cap funds have become a popular way for investors to get one diversified equity holding that covers large, mid and small caps in one shot. But within this crowded category, only a handful of funds have managed to combine strong returns with steady, repeatable performance across different years.

Why multi-cap funds matter

A multi-cap fund is an equity mutual fund that must invest at least 25 per cent each in large-cap, mid-cap and small-cap stocks as per SEBI’s category rules. The remaining 25 per cent is flexible, allowing the fund manager to tilt towards whichever segment looks more attractive at a given time.

For investors, this structure means you do not have to juggle multiple schemes just to balance growth potential and risk across market caps. A well-run multi-cap fund can act as the core of an equity portfolio, providing both diversification and meaningful growth over long periods.

No surprise then that the category has grown quickly. The five largest schemes now manage over Rs 15,000 crore each, with Nippon India Multi Cap alone handling around Rs 50,820 crore in assets. That kind of scale suggests not only investor interest but also sustained inflows over several years.

Popularity backed by performance

The appeal of multi-cap funds is not just marketing; recent returns have been strong as well. Looking at the top 10 performing multi-cap funds over the last three years (using direct plans), several funds have delivered annualised returns in the high teens to over 20 per cent.

Names like Kotak Multicap, Axis Multicap, Nippon India Multi Cap, HSBC Multi Cap and ITI Multicap have all featured in this leader list over the three-year window. However, a three-year return snapshot can be misleading if viewed in isolation. A fund can look great on a three-year chart simply because it had one or two standout years. What matters more for someone building a long-term portfolio is consistency, how often the fund has delivered, and how it behaves in different market conditions.

Why we focused on consistency

At Value Research, we usually evaluate consistency using long-period rolling returns across three, five or seven years. That smooths out short-term swings and gives a clearer picture of how a fund behaves through cycles.

Multi-cap funds, however, are a relatively new SEBI category, so many schemes do not have long enough histories to support meaningful long-term rolling return analysis. A three or four-year data series is simply too short to draw conclusions from rolling numbers alone.

To work around this, we shifted the lens from rolling returns to a combination of annual performance and month‑by‑month behaviour. We asked questions like:

• How often did the fund beat its benchmark each calendar year?
• Did it stay within the top half or top quartile of its peer group?
• On a monthly basis, how frequently did it outperform the benchmark?
• What kind of volatility did it take on to deliver those returns?

Using this framework, two multi-cap funds stood out for their blend of strong returns and relatively steady delivery: Kotak Multicap and Nippon India Multi Cap.

1) Kotak Multicap

Kotak Multicap is a five‑star‑rated fund on Value Research that has built a solid track record in a short span. It has consistently stayed among the better performers in its peer group while avoiding excessive volatility.

Over the last few calendar years, the fund has regularly beaten our in-house benchmark, the VR Multicap TRI. It has managed to stay in the top quartile of its category in three out of the last four calendar years. In 2022, it delivered double‑digit returns when the benchmark managed only low single digits. In 2023 and 2024, it again outpaced the index comfortably, with calendar‑year returns in the high 20s to low 40s compared to notably lower benchmark numbers. Even in 2025 (up to early October in our analysis window), the fund continued to stay ahead.

We also examined monthly performance from late 2022 to late 2025. During this 37‑month period, Kotak Multicap outperformed its benchmark in roughly two‑thirds of the months. That tells you the fund was not just dependent on a few big winners or one standout year; it kept adding value steadily, month after month.

2) Nippon India Multi Cap

Nippon India Multi Cap is another five‑star‑rated fund in the multi-cap universe on Value Research. It combines a long history, large asset base and a consistent performance record across different phases of the market.

Nippon India Multi Cap has managed to stay in the top quartile of its category in two out of the last four calendar years. In years like 2022, when markets were choppy and returns were modest, it still managed to deliver a double‑digit gain versus a much lower benchmark return. In subsequent years, it continued to beat the VR Multicap TRI by comfortable margins.

What really stands out for Nippon India Multi Cap is that it has done this with slightly lower volatility than the benchmark. Its standard deviation over the analysed period has been lower than that of the index, which means the journey for investors has been a bit smoother, even while delivering above‑benchmark performance.

This combination — consistent outperformance, lower‑than‑benchmark volatility and a five‑star rating — is rare in a category where many funds are still finding their footing. For investors evaluating multi-cap funds, it signals a history of disciplined risk management alongside return generation.

How other strong performers compare

Several other multi-cap funds have also delivered impressive three‑year returns. However, when we overlay consistency, the picture changes. Some of these funds have had one or two very strong years but have also had periods where they failed to beat the benchmark or slipped into the lower half of the category. Others have taken on noticeably higher volatility to generate their returns.

In this article, we have not tried to create a full ranking table or declare “winners”. Instead, we have highlighted Kotak Multicap and Nippon India Multi Cap as examples of funds that have combined:

• Strong three‑year performance
• Frequent outperformance versus the benchmark on an annual and monthly basis
• Reasonable or lower volatility compared to the index

That blend of characteristics is what makes them stand out in a still‑maturing category.

What this means for you

For someone building an equity portfolio, the main attraction of a multi-cap fund is the ability to get diversified exposure across market caps in a single scheme, without having to decide how much to put into separate large‑, mid‑ and small‑cap funds. The SEBI‑mandated minimum allocation of 25 per cent to each bucket ensures that no single segment dominates the portfolio.

Within this framework, funds like Kotak Multicap and Nippon India Multi Cap show how a disciplined approach can deliver strong returns with reasonable risk. Their track records suggest that stock selection, sector allocation and risk control have worked well over different market environments.

At the same time, it is important to remember a few points:

• Past performance, even if consistent, does not guarantee future returns.
• Multi-cap funds still carry equity risk, including sharp drawdowns during market corrections.
• Different funds within the category may follow different styles, such as more aggressive small‑cap exposure or more conservative large‑cap tilts.

Rather than treating any single scheme as a guaranteed solution, investors can use this kind of evidence to understand how multi-cap funds behave and to frame more informed questions, for example, how much volatility they are comfortable with, how long they plan to stay invested and how multi-cap funds will fit alongside other holdings.

Strong returns are only half the story. Consistency, volatility and fit within your portfolio are what determine whether a fund truly belongs in it. A five-star rating and a strong calendar-year track record are useful starting points, but knowing how a multi-cap fund slots into your specific situation requires a wider lens.

Value Research Fund Advisor gives you personalised, research-backed guidance to make that call with confidence.

Join Fund Advisor today