Choosing the Best Multi-Cap Mutual Fund in 2023: Kotak Standard, Motilal Oswal Multicap 35, and Mirae Asset India Equity Fund
When it comes to choosing the best multi-cap mutual fund for 2023, several options present themselves. Three of the most prominent are the Kotak Standard Multicap Fund, the Motilal Oswal Multicap 35 Fund, and the Mirae Asset India Equity Fund. This article aims to provide a comprehensive analysis to help you make an informed decision.
Understanding Multi-Cap Mutual Funds
Multi-cap funds, as the name suggests, have the flexibility to invest in funds of different sizes, from small-cap to large-cap stocks. This cap flexibility enables fund managers to adjust their strategies in response to market conditions. For instance, during a bearish market, investing in large-cap stocks may offer better downside protection compared to mid-cap or small-cap stocks.
Removing Motilal Oswal Multicap 35 Fund
Motilal Oswal Multicap 35 Fund is often categorized as a focused fund. In 2018, Motilal Oswal Asset Management Company (AMC) was only allowed to have one focused fund and decided to transform MOSL 35 into a multi-cap fund. However, despite the name, it behaves more like a focused fund. Therefore, comparing it directly with other multi-cap funds would not provide an accurate assessment of its performance.
Kotak Standard Multicap Fund
The Kotak Standard Multicap Fund is a popular choice among investors. While it was originally categorized as a focused fund, it has been reclassified as a multi-cap fund. Despite this reclassification, its performance is impressive and has attracted a significant amount of investor interest. Some critics argue that its assets under management (AUM) have grown too quickly. Nevertheless, the fund's performance record is notable.
According to Morningstar, the fund has exhibited consistent downside protection across bearish years. This is a crucial aspect of any multi-cap fund, as it helps protect against market downturns. The risk-return profile of Kotak Standard Multicap Fund is also favorable, with a particularly low standard deviation that is comparable to that of the BSE 500 TRI (Total Return Index). This combination of low risk and high return makes it a top contender in the multi-cap fund category.
Mirae Asset India Equity Fund
Mirae Asset India Equity Fund stands out as another strong choice. This fund has a longer history and a more consistent performance record compared to some of its contemporaries. One of the key advantages of this fund is its ability to deliver alpha (excess return) over the BSE 500 TRI while maintaining a relatively low standard deviation.
According to Morningstar, the fund has consistently outperformed both the index and the category in bearish years, reinforcing its reputation for downside protection. This consistency, combined with its robust performance record, makes it a compelling option for investors seeking a balanced risk profile.
Choosing the Best Option
Both the Kotak Standard Multicap Fund and the Mirae Asset India Equity Fund are excellent choices. The Kotak Standard Multicap Fund's fan following and rapid growth in AUM are compelling factors, while the Mirae Asset India Equity Fund's longer history and consistent performance make it an attractive option. Ultimately, the decision comes down to individual investor preferences and portfolio goals.
Given the longer history and slower AUM growth, the Mirae Asset India Equity Fund might slightly edge out the Kotak Standard Multicap Fund. However, it is a close and challenging choice to make.
Conclusion
Selecting the best multi-cap mutual fund can be a daunting task, but with careful consideration and research, you can make an informed decision. Whether you choose the Kotak Standard Multicap Fund, Motilal Oswal Multicap 35 Fund, or the Mirae Asset India Equity Fund, the key is to align your investment strategy with your long-term financial goals and risk tolerance.
For more information on these funds and other investment options, consult with a financial advisor or conduct further research to ensure you are making the best decision for your individual needs.