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Summary: Everyone loves a fund that takes bold bets. But do bigger risks really mean bigger rewards? We crunched the numbers on the five most aggressive multi-cap funds in the last 12 months and what we found was part predictable, part surprising.
The first multi-cap fund was launched in 2021. Fast forward to 2025, and the category has exploded, with 32 actively-managed multi-cap funds now vying for investor attention.
Although a lot of them haven’t yet crossed the crucial three-year mark, the ones that have are already off to a flying start. On average, they have clocked nearly 19 per cent annualised returns, compared with 16 per cent from flexi-cap funds over the same period.
A good start, as they say, is half the battle won. And investors seem to agree. According to AMFI data, multi-cap funds now manage over Rs 2.2 lakh crore, with Rs 2,500 crore of fresh inflows coming in just in October alone.
So, why are multi-caps getting noticed?
On paper, flexi-cap and multi-cap funds sound similar. Both invest across large, mid and small companies. But there’s a key difference in how they do it.
Flexi-cap funds have no restrictions. They can invest in any mix of large, mid or small caps. But because their performance is compared against a broad 500-stock index, they tend to stay close to it. Since large caps make up roughly 75 per cent of that index, flexi-cap funds also end up being large-cap-heavy. These funds currently park about 61 per cent of their money in large-cap stocks.
Multi-cap funds, on the other hand, play by stricter rules, and that’s exactly what makes them interesting.
By SEBI mandate, multi-cap funds must invest at least 25 per cent of their corpus in large-, mid-, and small-caps.
This discipline forces them to go beyond the safety of large caps and embrace riskier (but potentially higher-growth) opportunities in smaller companies. Currently, multi-cap funds on average hold 40 per cent in large caps, 29 per cent in mid caps, and 30 per cent in small caps.
The most aggressive of them all
We went one step further to find the five multi-cap funds that are leaning even more heavily towards the mid- and small-cap end of the market, as of October 31, 2025. And here’s what we found:
| Fund (Direct plan) | Mid-cap holding (%) | Small-cap holding (%) | Total mid/small exposure (%) |
|---|---|---|---|
| Samco Multi Cap Fund | 22.7 | 55 | 77.7 |
| Motilal Oswal Multi Cap Fund | 41.8 | 31.6 | 73.4 |
| DSP Multicap Fund | 29.4 | 41.4 | 70.8 |
| Invesco India Multicap Fund | 39.5 | 27.5 | 67 |
| Groww Multicap Fund | 29.6 | 35.8 | 65.5 |
But, does going small really pay off?
To understand whether funds that take bigger bets on mid- and small-cap stocks actually perform better, we looked at the five multi-cap funds with the highest average exposure to these segments over the past 12 months, and compared that with their one-year returns.
The results were not what you’d expect.
| Multi-cap funds (Direct plans) | 12-month average mid-cap holding (%) | 12-month average small-cap holding (%) | Total mid & small-cap holding over last 12 months (%) | Return (%) |
|---|---|---|---|---|
| Motilal Oswal | 38.5 | 31.2 | 69.7 | 15.7 |
| DSP | 29.3 | 40.3 | 69.6 | 0.6 |
| WhiteOak | 28.5 | 33.5 | 62 | 11.5 |
| Bank of India | 30.2 | 31.7 | 61.9 | 5.6 |
| Invesco India | 33.4 | 28.1 | 61.5 | -0.4 |
| Performance between November 1, 2024 - November 11, 2025 (%). Groww and Samco funds are not in this list, as they are yet to complete 12 months. | ||||
Performance between November 1, 2024 - November 11, 2025 (%). Groww and Samco funds are not in this list, as they are yet to complete 12 months.
A higher allocation to mid- and small-caps doesn’t necessarily translate into higher returns. Of course, one year is too short a window to draw firm conclusions (this is more of an academic exercise), but the contrast is still interesting.
For instance, both Motilal Oswal Multi Cap Fund and WhiteOak Multi Cap Fund comfortably outperformed the Nifty 500 TRI benchmark, delivering 15.7 per cent and 11.5 per cent returns, respectively, versus the benchmark’s 5.4 per cent.
However, DSP Multi Cap Fund, despite its heavy exposure to mid and small caps, struggled. It managed just 0.6 per cent, barely staying afloat. In fact, the other two funds on the list either underperformed (Invesco India) or only marginally (Bank of India) beat the index.
The bottom line
Multi-cap funds’ built-in discipline of spreading bets across market caps can help investors capture growth while cushioning risk over time. But as this data shows, even the most aggressive portfolios don’t always guarantee superior performance. A higher dose of mid and small caps can amplify gains, but it can also magnify volatility. At the end of the day, stock selection remains key, whether investing in large, mid or small-cap stocks.
So, if you’re trying to figure out which multi-cap fund deserves your money, don’t go by return charts alone. Every investor’s goals and comfort with risk are different, and that’s where Value Research Fund Advisor comes in.
Our analysts continuously track every fund in the market, studying their portfolios, performance consistency, volatility and fund manager strategy. Based on this deep research, we curate personalised fund recommendations that align with your risk profile, investment horizon and financial goals.
In short, you don’t just get a list of ‘top performers’, you get a shortlist that fits you.
So, explore Value Research Fund Advisor today.
Also read: The three boldest multi-cap funds right now
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