1. Sebi's categorization mandates a mid-cap / small-cap fund to invest 65%-100% in mid-cap and small-cap stocks resp., with only rest in other stocks and debt products.
2. Sebi has also defined 1st 100 companies as large-cap, next 150 companies as mid-cap, and all other companies as small-cap.
3. Sebi mandates a multi-cap fund to invest 65%-100% in all equity stocks of any market cap, with rest in debt products.
4. This allows it flexibility in portfolio to cushion itself rapidly to changing markets, or redemption pressure, by suitably picking from more stocks.
5. Multi-cap funds generally exhibit a large-cap bias, to be on safer side of liquidity concerns, and also due to restricted information on mid-cap and small-cap stocks.
6. Due to much larger stock options, multi-cap funds can benefit from both value and growth investing too.
7. Investing in a mid-cap / small-cap fund requires immense patience, for allowing cost-averaging during a full market cycle, and is considered an aggressive style of investment.
8. While mid- and small-cap funds have given higher returns over 10+ years, making them obvious choices for aggressive investors, opting for top-rated multicap funds would suit lesser aggressive investors better.
2. Sebi has also defined 1st 100 companies as large-cap, next 150 companies as mid-cap, and all other companies as small-cap.
3. Sebi mandates a multi-cap fund to invest 65%-100% in all equity stocks of any market cap, with rest in debt products.
4. This allows it flexibility in portfolio to cushion itself rapidly to changing markets, or redemption pressure, by suitably picking from more stocks.
5. Multi-cap funds generally exhibit a large-cap bias, to be on safer side of liquidity concerns, and also due to restricted information on mid-cap and small-cap stocks.
6. Due to much larger stock options, multi-cap funds can benefit from both value and growth investing too.
7. Investing in a mid-cap / small-cap fund requires immense patience, for allowing cost-averaging during a full market cycle, and is considered an aggressive style of investment.
8. While mid- and small-cap funds have given higher returns over 10+ years, making them obvious choices for aggressive investors, opting for top-rated multicap funds would suit lesser aggressive investors better.