The manager invests in all these categories in the multi-cap fund, aligning with the market trends and economic factors besides the strategy of the fund. As per the rules of SEBI, however, at least 25% of the total assets in the multi-cap fund should be invested in each of the three categories, large-cap, mid-cap, and small-cap, thus having a balanced mix and avoiding the risk of the fund being too concentrated on one segment of the market.


Advantages of Multi-cap Funds

1. Diversified Exposure: Multi-cap funds give exposure to companies of different sizes, industries, and growth stages. This diversification helps spread risk as each category of stock reacts differently to market conditions.

2. Growth and Stability Balance: The large-cap stocks in the fund provide stability, while mid- and small-cap stocks bring growth opportunities. This approach allows for potential gains without excessive risk.