Tuesday, January 19, 2016

A bread-and-butter category for equity investors


You can invest in stocks of each type of market capitalisation by investing in multi-cap funds


A bread-and-butter category for equity investors, multicap funds have exposures to large-, mid- and small-cap stocks. They have held their ground in the last one year, while large-cap funds have stumbled. Tracking the Nifty and the Sensex, pure large-cap funds now sport a negative return for one year, while multi-cap funds have a marginal gain of 1.4 per cent.


The multi-cap category features funds that usually park anywhere above 60 per cent of their assets in large-cap stocks and the rest in mid and small caps. They save investors the trouble of arriving at relative allocations between large-, mid- and small-cap stocks. Most funds in this space also use some amount of tactical reallocation between large/mid caps based on market conditions, though they don't swing their allocations to extremes.


An analysis of the top rankers shows that growth-style funds. The trailing three-year CAGR for the category is 16.9 per cent and the five-year CAGR is 10 per cent. Given that mid- and small-cap stocks do add on a volatile element, SIP returns on multi-cap funds tend to be significantly better than point-to-point returns. They now stand at 18.1 per cent for three years and 16.1 per cent for five years.
 Most-popular stock holdings
Company
Fund count
Net assets (%)
S&P BSE 200 (%)
76
6.5
5.49
73
5.37
5.69
71
4.18
3.92
66
2.87
1.96
64
3
1.58
59
3.11
1.84
57
3.36
2.69
53
1.34
2.29
52
1.66
3.22
51
1.14
4.75
49
1.78
2.3
49
2.18
4.31
49
1.8
1.21
48
1.09
1.21
42
1.01
0.73

The category is quite popular and manages R1.11 lakh crore in assets as of November 30, 2015.



2 comments:

  1. Great post! I have found few more tools for investors who are looking for great analysis and research. You can try smallcase by Zerodha or Trade Brains portal (https://portal.tradebrains.in/stock/ITC/standalone) for your research purpose.

    ReplyDelete
  2. Great post! I have found few more tools for investors who are looking for great analysis and research. You can try smallcase by Zerodha or Trade Brains portal for your research purpose.

    ReplyDelete