VR Logo

Of multi-cap and large and mid cap, which category is better?

Dhirendra Kumar compares multi-cap and large- & mid-cap funds based on their investment flexibility

Which equity fund category is better - multi-cap or large & mid cap?
- Abhinav

A multi-cap fund can invest in every segment of the equity market - small-, mid-, or large-cap stocks. A large and mid-cap fund is dominantly large cap but also invests in the mid-cap space.

In the current scenario, large and mid-cap may turn out to be better because, in my opinion, large caps lead the momentum during market turnarounds. But if you want to invest with a long-term horizon and with ease, then low-maintenance multi-cap funds are a better option, as fund managers have the complete flexibility to invest across the investable universe.

A few good options of multi-cap funds can be Motilal Oswal Multicap 35 Fund, Parag Parikh Long Term Equity Fund, SBI Focused Equity Fund, Kotak Standard Multicap Fund, etc.