3 Top-Performing Multi-Cap Mutual Funds Over 10 Years

Summary

This video script discusses the growth of India's economy and its impact on stock market performance, highlighting the outperformance of large-cap, mid-cap, and small-cap market segments since April 2005. It introduces multi-cap funds as a diversified investment approach, showcasing their average performance over 1, 3, 5, and 10 years. The script focuses on the top three performing multi-cap funds over a decade, analyzing their critical ratios like standard deviation, beta, sharpe ratio, portfolio turnover, and expense ratio. It concludes by considering the suitability of multi-cap funds for investors with a higher risk tolerance.

Takeaways

• 📈 India's economy is one of the fastest-growing in the world, outpacing the US, Europe, and even China in terms of GDP growth.
• 💹 Indian stock markets, including large-cap, mid-cap, and small-cap segments, have been performing well, as reflected in indices like NIFTY 50.
• 📊 There is no clear winner among market segments as they have performed differently at various times, indicating the importance of a diversified investment approach.
• 🌐 Multi-cap funds invest across large-cap, mid-cap, and small-cap companies, providing a balanced investment strategy.
• 📊 Over 1, 3, 5, and 10 years, multi-cap funds have shown high percentage growth, outperforming benchmarks in the financial sector.
• 🏆 The top three performing multi-cap funds over the past decade have significantly beaten their benchmarks, according to the data as of July 5th, 2024.
• 📝 Multi-cap funds must hold at least 75% of their assets in equity and equity-related instruments and at least 25% in large-cap, mid-cap, and small-cap stocks.
• 🔄 The introduction of 'Flexible Cap' funds by SEBI in 2020 allows funds to invest without restrictions in large-cap, mid-cap, and small-cap stocks, leading to a shift in fund categorization.
• 📉 The top three multi-cap funds have shown a high standard deviation, indicating higher volatility compared to the category average.
• 📈 The top-performing funds have a beta close to or higher than 1, suggesting they are as risky or riskier than the market.
• 📊 Sharpe ratios for these funds indicate that for every unit of risk, they have provided excess returns, with one of the funds showing a Sharpe ratio of 1.82.

Q & A

What is the main topic of the video script?

The main topic of the video script is about the performance of multi-cap funds in the Indian economy and how they have outperformed their benchmarks over the past decade.

What are the three market segments mentioned in the script?

The three market segments mentioned are large-cap, mid-cap, and small-cap market segments, represented by NIFTY 100, NIFTY MidCap 150, and NIFTY SmallCap 250 respectively.

How have the three market segments performed from April 2005 to March 2024 according to the script?

The script indicates that all three market segments—large-cap, mid-cap, and small-cap—have given more than 15% CAGR during this period, but there is no clear winner among them as they have performed well at different times.

What is the suggested investment approach to benefit from the growth of the stock market across different market segments?

The script suggests investing in multi-cap funds, which allocate assets across large, mid, and small-cap stocks, as a way to benefit from the growth of the stock market.

What is the performance of the multi-cap fund category over 1, 3, 5, and 10 years?

The script states that the multi-cap fund category has shown the highest percentage growth in the Financial Year 24 among the asset classes.

What is the total assets under management (AUM) of multi-cap funds as of the past 10 years?

As of the past 10 years, the total AUM of multi-cap funds that have performed well is at 85, as per the script.

What are the top three performing multi-cap funds that have beaten their benchmarks over 10 years?

The script does not provide the names of the top three performing multi-cap funds directly, but it mentions that it will discuss them in the video.

What is the definition of multi-cap funds as per SEBI guidelines?

As per SEBI guidelines, multi-cap funds should invest in a minimum of 75 assets, including equity and equity-related instruments, and allocate at least 25% of their assets towards large-cap, mid-cap, and small-cap stocks.

What is the difference between multi-cap funds and flexi-cap funds as introduced by SEBI in 2020?

Flexi-cap funds, introduced by SEBI in 2020, allow for investments in large, mid, and small-cap stocks without the minimum 25% allocation restriction that multi-cap funds have.

What is the total number of multi-cap fund schemes and their total AUM as of June 2024 according to the script?

As of June 2024, there are 25 multi-cap fund schemes with a total AUM of 5 trillion.

What are some of the critical performance metrics discussed for the multi-cap funds in the script?

The script discusses several critical performance metrics including Standard Deviation, Beta, Sharpe Ratio, Portfolio Turnover Ratio, and Expense Ratio for the multi-cap funds.