Mirae Asset Mutual Fund has introduced the Mirae Asset Multicap Fund, an open-ended equity scheme investing in large-cap, mid-cap, and small-cap stocks.
The New Fund Offer (NFO) runs from July 28, 2023, to August 11, 2023. The fund's benchmark index will be the NIFTY 500 Multicap 50:25:25 TRI, comprising companies from the NIFTY 500 index with fixed weights of 50 per cent for large-cap, 25 per cent each for mid-cap, and small-cap segments.
The minimum initial investment in the fund is Rs 5,000 and in multiples of Re 1 after that. After the NFO, the minimum additional purchase amount will be Rs 1,000, and after that, in multiples of Re 1.
Multicap Fund Category
Multi-cap funds follow the Securities and Exchange Board of India's (Sebi) mandate of allocating a minimum of 25 per cent in each market cap category. This mandate reduces the fund manager's discretion. These funds can go overweight in any category if they maintain the minimum allocation of 25 per cent. Instead of going overweight on any equity category with the remaining 25 per cent, they can also invest in debt and money market instruments. A 10 per cent allocation can be made in REIT and InvIT Units.
The multi-cap fund category has delivered average returns of 24.98 per cent and 30.1 per cent over the one-year and three-year periods ending July 28, 2023, respectively.
Investment Philosophy Of Mirae Asset Multicap Fund
Its press release says each category will have a minimum of 25 per cent and a maximum of 50 per cent allocation, thus maintaining even participation across segments. The philosophy is to diversify investments across large-cap stocks (Top 100 stocks by market cap) for lower risk, mid-cap stocks (next 150) with reasonable valuations, and small-cap stocks (beyond the top 250) for higher alpha potential but higher risk.
The fund house says the remaining 25 per cent of investments will be tactical, dynamically allocated across market capitalisations.
Different industries have different representations across market caps. Hence, the fund house says it's essential to have reasonable participation in large-cap and non-large-cap segments. Says Ankit Jain, Fund Manager for Mirae Asset Multicap Fund, the fund's diversification balances risk and reward, making it a dynamic option for investors.
"Mirae Asset Multicap Fund being capitalisation and sector agnostic offers investors the experience of staying invested across stocks and sectors that are experiencing benefits of excellence and technological changes being ushered into the economy. This is also an opportunity for those investors who do not want their portfolio to be widely spread but enjoy the best of all sectors," the release adds.