Kotak Multi-Cap Fund: Should you invest?

Despite the witnessed outflows in the equity mutual fund last year, if there was the good news that cheered investors was the Sebi’s decision on the multi-cap. This came on the back of the claim that mutual fund houses were misguiding the investors in the name of the multi-cap fund and not investing the assets towards other categories. As per the Sebi guidelines, the fund houses indeed were focused up to 70% to 80% in large-cap companies only and thereby allocating very less towards another category. The lack of limitations based on market capitalisation led to haywire of trust among the investors.

The new restrictions on multi-cap, which came into effect from January 2021, called for a 25% minimum allocation of assets towards each large, small, and mid-cap and gave the remaining 25% of assets liberty to be used by fund managers in any category.

Having said that, the last few months witnessed many fund houses launching a multi-cap fund to bring that faith again amongst the investors. Recently, Kotak Mahindra Asset Management Company (AMC) launched Kotak Multicap Fund, which is open-ended that contains the right mix of large-cap, mid-cap, and small-cap stocks.

The fund expects to provide investors with stability, growth, and potential for giving investors the ‘Power of All in One’.’

Investment objective

The fund investment objective is to generate long-term capital appreciation through diversified equity and equity-related securities portfolio across market capitalisation.

Further, the fund is suitable for investors of all types seeking to meet long-term financial goals such as a child’s education, retirement, or the purchase of a dream home.

The fund is benchmarked against the Nifty 500 multicap 50:25:25 Total Returns Index.

Management views

The fund would be managed by Harsha Upadhyaya, Devender Singhal, Abhishek Bisen, and Arjun Khanna.

“The equity market is a triveni sangam of largecap, midcap and smallcap stocks, each having its own return and risk profiles. At Kotak mutual fund, we have added value to our investors by outperforming benchmark indices regularly across most time periods in all three categories – smallcap, midcap, and largecap funds and thus, are now offering the power of all 3 in one fund,” said Harsha Upadhyaya, President and CIO – Equity, Kotak Mahindra AMC.

What should investors know?

The minimum initial purchase (Non-SIP): Rs 5,000/- and multiples of Rs 1 for purchase and Rs 0.01 for switches. – SIP Rs 500/- subject to a minimum of 10 SIP instalments of Rs 500/- each.

The maximum total expense ratio allowable is 2.25% as per the Sebi regulation.

The entry load is nil, and the exit load with attract a penalty of 1% if exit within the one year of investment, and after one year, no exit charge would be applicable.

The scheme offers two plans — regular and direct.

The fund falls under the category of ‘Very High Risk,’ and the investors should consult their financial advisors to check the product suitability.