ITI multi cap fund is a multicap fund from the house of ITI
mutual fund.
It also happens to be the first equity mutual fund from the
house of ITI mutual fund.
Unlike other multi cap mutual funds, ITI multi cap fund decided
to stay on as a multi cap fund rather than convert itself to a flexi cap fund
like most other multi cap mutual funds did after new SEBI guideline on mandate
of multi cap mutual funds came into effect from 1st February 2021.
Fund |
ITI Multi cap
Fund |
Category |
Multicap |
AUM (Rs Cr) |
198 cr (As on
28/02/2021) |
Fund Manager |
Mr George
Heber Joseph & Mr Pradeep
Gokhale |
Benchmark |
Nifty 500 Multicap 50:25:25 TRI |
What
is a multi cap mutual fund?
A multi cap mutual fund needs to invest in the following
manner now:
- Minimum 25% investment into equity and equity related instruments of large cap companies (as opposed to no such restriction earlier).
- Minimum 25% investment into equity and equity related instruments of mid cap companies (as opposed to no such restriction earlier).
- Minimum 25% investment into equity and equity related instruments of small cap companies (as opposed to no such restriction earlier).
A multi cap mutual fund would now require a minimum of 75%
investment in equity as opposed to 65% earlier.
Key features of ITI Multi cap fund
ITI multi cap was the first ever equity fund launched by ITI
mutual fund.
It has a higher turnover ratio compared to other multi cap
mutual funds making it one of the most actively managed multi cap funds.
It is far more diversified than other multi cap funds which
can be ascertained also by its high number of stocks.
Fund
Manager
The fund is co-managed by Mr. George Heber Joseph and Mr.
Pradeep Gokhale.
Prior to ITI mutual fund, Mr. George Heber Joseph was associated
with ICICI mutual fund and was managing their ELSS and multi cap funds among
others along with their PMS.
Mr. Pradeep Gokhale on the other hand prior to ITI mutual
fund was associated with Tata mutual fund and was managing their large cap,
multi cap, large and mid cap as well as their tax savings mutual fund.
Both the fund managers therefore together bring to the table
ample knowledge and experience.
New
SEBI rules and ITI multi cap fund
With the new SEBI rules kicking in from 1st
February 2021, every multi cap fund now needs a minimum of 25% investment into
each large, mid and small cap stocks.
Most multi cap funds after the announcement decided to
convert themselves to a flexi cap in order to avoid the new mandate and
continue to invest like the old mandate which was possible as a flexi cap fund.
ITI multi cap fund along with a few others though decided to
stay on as a multi cap fund.
This makes a lot more sense considering its AUM and also its
investing strategy ever since its inception.
ITI multi cap fund has always been an actively managed fund
investing across all caps and sectors with meaningful allocation towards mid
and small cap stocks.
It was always a slightly more aggressive multi cap fund
compared to its peers so staying on as a multi cap fund with the new mandate is
only continuing what was already set in motion.
With its AUM on the lower side compared to most of the
bigger names, it also enjoys the benefit of liquidity which plays a pivotal
role in mid and small cap investing.
Additional reading: Click Here to read about the overlapping issue with Mirae asset mutual fund schemes
Difference
between flexi cap and multi cap mutual fund
A flexi cap fund needs a minimum of 65% investment in equity. |
A multi cap
fund needs a minimum of 75% investment in equity. |
|
|
No compulsory
investment in mid and small cap stocks |
A multi cap
fund needs to compulsorily invest a minimum of 25% each in mid and small cap
stocks. |
|
|
It can invest
its complete portfolio into large cap stocks if needed. |
It can invest
only up to 50% of its complete portfolio in to large cap stocks at any given
time. |
|
|
Needs a lower
minimum exposure to equity as compared to a multi cap fund. |
Needs a higher
minimum exposure to equity as compare to a flexi cap fund. |
ITI
multi cap fund portfolio
As on 28th February 2021, the fund was overweight
on the following sectors:
- Financial
- Energy
- Healthcare &
- FMCG
While it was underweight on the following sectors:
- Technology
- Construction
- Chemicals &
- Services
As previously mentioned the fund has always been an actively
managed and well diversified fund which can be attested by the fact that as on
28th February 2021, it has allocated its AUM to 120 stocks.
The most by any multi cap fund.
Its allocation to the various caps is as under:
- Large cap – 36.26%
- Mid cap – 34.53%
- Small cap - 29.21 %
The fund had a below par period from June to September when
its overall exposure to equity was at a bare minimum thereby missing out on the
market rally.
Ever since then though the fund has recuperated well, more
so since the beginning of 2021 during the period which not only has it left
behind other funds but has also beaten the benchmark handsomely.
ITI Multi cap fund |
11.32 % |
S&P BSE 500 TRI |
7.41 % |
Multi cap category |
9.91 % |
Multi
cap mutual funds list
List of Multicap funds as on 1st March 2021 |
Baroda Multi cap |
BNP Paribas Multi cap |
ICICI Pru Multi cap |
Invesco Multi cap |
ITI Multi cap |
Mahindra Manulife Multi
cap |
Nippon Multi cap |
Principal Multi cap |
Quant Active Multi cap |
Sundaram Equity Multi cap |
Is it good to invest in multi cap funds?
The most certain thing about a
multi cap fund is that you can be sure that the fund at all times would be 25%
invested each in large cap, mid cap and small cap stocks.
You can therefore be sure as to
the investing methodology of the fund.
Needless to say, this would be on
the more aggressive side since 50% would be invested in mid and small cap
stocks.
Therefore, one needs to have
patience and an appetite to go through periods of volatility since the fund
will need 50% investment in mid and small cap stocks at all times.
Another point to keep in mind is
that due to the compulsion of mid and small cap stocks, fund managers would
more likely than not have a higher number of stocks in the portfolio as
compared to earlier times when most multi cap funds would have around 40-50
stocks on an average.
A multi cap fund can find place in
a portfolio if you can analyse and understand the fund, have a portfolio that
is aligned with your goals and you have the requisite patience and stability to
stay invested in a volatile market.
The current style of investing in
a multi cap fund is no more like the earlier times when fund managers could
take refuge in large cap stocks during volatile times and increase exposure in
mid and small cap stocks based on attractive valuations.
A fund manager would feel
restricted in moving across different sectors and caps considering she needs to
follow the new mandate of 25% minimum investment in each large, mid and small
cap stocks.
Therefore it would be foolish and
naïve as an investor if you expect your multi cap fund to function in the same
manner as it would earlier.
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