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What are Multicap and Large & Mid Cap Fund?

What are Multicap and Large & Mid Cap Fund?

Published on 15 December 2021 .Views 3 .Comments 0

1. Introduction

Large & Mid Cap is a new category defined in recent SEBI guideline. There was no formal or informal category by this name before. In this category fund house invest in both large cap and mid cap as per specific percentage described by SEBI.

Whereas Multi-Cap is an old category where fund manager has complete freedom to allocate funds in stocks across market capitalisations.

2. Meaning of Large & Mid Cap & Multicap Funds

  • Large & Mid Cap is defined as the category in which a fund has to allocate a min 35% to Large Caps and min 35% to Mid Cap stocks. Many large and good performing funds have categorized themselves into this category such as Mirae Asset Emerging Bluechip Fund (which was mostly tagged in mid cap before), Reliance Vision Fund (which was tagged as Large Cap before) etc.
  • In Multicap category, there is no restriction on minimum allocation to large, mid or small cap stocks. Fund can take 0 to 100% allocation in any Large, Mid or Small Cap stocks. There are already some big funds settled in this category such as HDFC Equity Fund, Franklin India Equity Fund (earlier known as Franklin India Prima Plus Fund), Kotak Standard Multi Cap Fund (earlier known as Kotak Select Focus Fund) etc.

3. Difference Between Large & Mid Cap & Multicap Funds

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