Recently, a 28-year old individual in my neighbourhood told me he wanted to start an SIP for 10 years. He has a fixed deposit and his employee provident fund, but has zero exposure to equity. I asked two financial advisers what they would suggest, with regards to the type of fund. His time horizon was long, but since it was his first venture into equity, they both suggested that he opt for a multi-cap fund.
Multi-cap funds have the latitude to invest across the market-cap spectrum; be it large, mid or small cap stocks. The requirement being that a minimum investment in equity and equity related instruments must be 65% of the total assets. Depending on the fund manager in question, they can be opportunistic and aggressive, or emphasize on preserving capital and delivering positive absolute returns in a variety of market environments.
Here are the funds Morningstar’s analysts - Himanshu Srivastava, Kavitha Krishnan and Nehal Meshram, looked at and rated over the past year. The analyst views can be accessed by clicking on the name of the fund.
Kotak Standard Multicap
This fund stands out in the multi-cap category and remains a strong proposition as a core investment.
- Analyst Rating: Silver
- Star Rating: 5 stars
- Investment Style: Large Growth
- Turnover: 33%
- 5-year performance: 14.73%
- Fund Manager: Harsha Upadhyaya
- Analyst: Kavitha Krishnan
- Date of Analysis: June 2019
L&T Equity
Though the fund manager is extremely experienced, we expect to see a better showing on the fund’s performance.
- Analyst Rating: Bronze
- Star Rating: 3 stars
- Investment Style: Large Growth
- Turnover: 47%
- 5-year performance: 9.74%
- Fund Manager: Soumendra Nath Lahiri
- Analyst: Kavitha Krishnan
- Date of Analysis: May 2019
HDFC Equity
Our conviction in the fund manager and this fund remains intact.
- Analyst Rating: Gold
- Star Rating: 4 stars
- Investment Style: Large Blend
- Turnover: 31%
- 5-year performance:
- Fund Manager: Prashant Jain
- Analyst: Himanshu Srivastava
- Date of Analysis: April 2019
Aditya Birla Sun Life Equity
The fund manager’s confident execution and ability to deliver consistently drives our rating.
- Analyst Rating: Bronze
- Star Rating: 3 stars
- Investment Style: Large Growth
- Turnover: 245%
- 5-year performance: 11.61%
- Fund Manager: Anil Shah
- Analyst: Kavitha Krishnan
- Date of Analysis: March 2019
DSP Equity
The fund manager took over three years ago, and we are yet to build conviction in him as we had in the earlier one.
- Analyst Rating: Neutral
- Star Rating: 3 stars
- Investment Style: Large Growth
- Turnover: 60%
- 5-year performance: 10.87%
- Fund Manager: Atul Bhole
- Analyst: Himanshu Srivastava
- Date of Analysis: March 2019
Franklin India Equity
This fund stands on top of the podium and has all the ingredients to be the investors’ preferred choice.
- Analyst Rating: Gold
- Star Rating: 4 stars
- Investment Style: Large Growth
- Turnover: 22%
- 5-year performance: 11.39%
- Fund Manager: Anand Radhakrishnan
- Analyst: Himanshu Srivastava
- Date of Analysis: December 2018
Reliance Multicap
The continuity of the fund manager must be applauded. He is skillful and has been at the helm for over a decade and built a long-term track record.
- Analyst Rating: Silver
- Star Rating: 4 stars
- Investment Style: Large Growth
- Turnover: 61%
- 5-year performance: 10.16%
- Fund Manager: Sailesh Raj Bhan
- Analyst: Himanshu Srivastava
- Date of Analysis: December 2018
IDFC Multi Cap
A very good fund manager, but took over the fund three years ago. His presence should bring the fund out of the woods.
- Analyst Rating: Bronze
- Star Rating: 4 stars
- Investment Style: Large Growth
- Turnover: 21%
- 5-year performance: 10.23%
- Fund Manager: Anoop Bhaskar
- Analyst: Himanshu Srivastava
- Date of Analysis: November 2018
UTI Equity
The fund manager is yet to establish a long-term track record, hence our cautious stance and the assignment of a Neutral rating.
- Analyst Rating: Neutral
- Star Rating: 4 stars
- Investment Style: Large Growth
- Turnover: 31%
- 5-year performance: 10.51%
- Fund Manager: Ajay Tyagi
- Analyst: Nehal Meshram
- Date of Analysis: September 2018
