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Summary: Some multi-cap funds are playing it bold, really bold. They’ve parked more than half of your money in smaller companies, chasing higher growth potential. Let’s find out which funds are taking the biggest bets, and how those bets are playing out.
Multi-cap funds have a simple yet powerful idea behind them. They give fund managers the freedom to invest across large, mid and small companies while maintaining a balance among them.
As per SEBI’s rules, every multi-cap fund must invest at least 25 per cent each in large-cap, mid-cap and small-cap stocks. The remaining 25 per cent can be allocated freely across any of these categories based on the fund manager’s view of market opportunities.
This flexible mandate allows multi-cap funds to benefit from the relative stability of large caps and the higher growth potential of mid and small caps. It’s also what makes them a popular “core” equity option for many investors. In fact, as of now, over 1.07 crore unique investors have put their faith in multi-cap funds, which together manage a whopping Rs 2.1 lakh crore in assets, as per data retrieved from AMFI (Association of Mutual Funds in India).
Because these funds must mandatorily hold stocks across all three market-cap segments, their real differentiator can lie in how much they tilt towards smaller companies.
The most aggressive multi-cap funds
Funds that have a higher exposure to small-cap and mid-cap stocks are typically considered more aggressive. That’s because these smaller stocks can shoot up faster during bull runs but also fall harder during downturns. In simple terms, the more your fund leans into smaller companies, the more ‘adventurous’ its portfolio can be.
So, let’s see which funds have put the most money into smaller companies, the ones that fall in the bottom 30 per cent of the market by size, as of September 30, 2025.
The boldest multi-cap funds
| Fund name | Exposure to the smallest companies* |
|---|---|
| DSP Multi Cap Fund | 60.0% |
| SBI Multi Cap Fund | 54.4% |
| WhiteOak Capital Multi Cap Fund | 52.7% |
| *As of September 30, 2025. By boldest, we mean the bottom 30 per cent of market capitalisation. Only active funds with at least one year of history have been considered. | |
Out of the 27 multi-cap funds that have been around for at least a year, these three stand out for having more than half of their portfolios invested in the smallest listed companies in the country.
Close on their heels are ICICI Prudential Multi Cap Fund and Quant Multi Asset Fund, with about 49.7 per cent exposure to these smaller companies.
This level of exposure clearly shows which fund houses are positioning themselves for higher potential upside, while also taking on higher risk.
But does bold always mean beautiful?
Not necessarily. Or at least that’s what their 12-month performance suggests. While 12 months is too short a period to judge a fund, the numbers show that an aggressive portfolio isn’t always a winning one. (Please note that both DSP and WhiteOak Capital’s funds are relatively new. That’s why we’ve only looked at one-year performance for uniformity.)
- WhiteOak Capital Multi Cap Fund, with over 52 per cent in smaller stocks, has been the second-best performer among all multi-cap funds in the past 12 months, posting a 7.3 per cent gain.
- SBI Multi Cap Fund has also delivered top-quartile performance, proving that smart small-cap selection can indeed pay off.
- However, DSP Multi Cap Fund, which is the most aggressive of the lot, has had a tough last 12 months, falling 1.9 per cent and ending up in the bottom quartile.
This sharp contrast in fortunes tells you that taking on more risk doesn’t guarantee better returns. The quality of stock selection and portfolio construction matters just as much—if not more—than the level of small-cap exposure.
Should you invest in these funds?
If you’re looking to explore multi-cap funds, these numbers are a great starting point, but they’re not the full story.
Aggressive funds may perform brilliantly in a rising market but can also see sharper declines during corrections. Conservative investors, meanwhile, may prefer funds with a higher large-cap allocation for steadier returns.
To help you make sense of this, you can check out Value Research Ratings for every multi-cap fund. These star ratings, ranging from one star to five stars, are based on a fund’s risk-adjusted performance. That means they reward not just high returns but also consistency and stability.
These ratings make for a great first step in your research, giving you a sense of which funds have delivered superior long-term results with reasonable volatility.
That said, while ratings are a helpful starting point, they don’t tell you which fund is the best fit for you.
That’s where Value Research Fund Advisor comes in. It’s a comprehensive advisory service that builds a personalised investment plan for you by selecting the right mutual funds based on your financial goals, time horizon and risk tolerance.
It doesn’t just stop at picking funds; it helps you understand how to allocate, when to rebalance, and how to stay on track with your long-term goals.
Also read: The two most consistent multi-cap funds right now
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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