Kotak Multi Cap fund NFO launched


Kotak Mutual Fund is coming out with a NFO in the form of Kotak Multi cap Fund.

Kotak Multi cap Fund would be a multi cap fund with minimum allocation requirement to large, mid and small caps.

The fund would be open for subscription from September 08, 2021 to September 22, 2021.


kotak multi cap fund

NFO details for Kotak Multi Cap Fund

Scheme Opens


Scheme Closes


Fund Manager

Mr.Harsha Upadhyaya

Mr Devender Singhal

Mr Abhishek Bisen

Mr Devender Singhal


Nifty 500 Multicap 50:25:25 TRI

Minimum Investment


Fund Category

Multi Cap

Exit Load

Nil for  10% of investment amount if redeemed/switched within 1 year

1% for remaining amount

Nil if redeemed/switched after 1 year


Kotak Multi Cap Fund would be an open – ended dynamic equity fund with minimum allocation requirement to invest 25% in each large, mid and small cap stocks with the remaining 25% at the complete discretion of the fund manager.

Additional reading: Click Here to read our complete review of Kotak Standard Multicap Fund

Kotak Multi Cap Fund Investment Objectives

The investment objective of the fund is to generate long term growth while identifying and investing in opportunities across market caps through an in house market cap model.

There is no guarantee that the investment objectives of the scheme would be achieved


Kotak Multi Cap Fund Allocation

The asset allocation for the fund would be something like this

Asset Class

Minimum %

Maximum %

Equity and Equity Related instruments



Debt and money market instruments



Units issues by REITS and InvITs




The above figures are only indicative and not fixed, the fund managers have the liberty to move across the asset classes depending upon prevailing market conditions as long as they remain within the mandate permitted.

The fund can also invest in REITs and InvITs if so desired.


        Multi cap mutual funds were once the most sought-after mutual fund schemes.

So much so that it would be almost unimaginable to have a mutual fund portfolio without a multicap fund in it.

Multi cap mutual funds would also be recommend to first time equity investors.

This is all in the past now, with new rules for multi cap mutual funds brought about by SEBI effectively 2021 they now require a fresh approach and perspective since the old rules no longer apply.


Are you investing in the right mutual funds?

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.


Additional reading: Click Here to read about the various types of equity mutual funds 


What is a flexi cap mutual fund?

A flexi cap mutual fund needs a minimum of 65% investment in equities at all times.

There is no restriction with regards to caps or sectors.

There is no restriction with regards the remaining 35% as well.

The fund manager can invest the remaining 35% as per her wish in any of the following:

  1. Domestic Equity
  2. International Equity
  3. Cash
  4. Debt

What is imperative is that 65% at all times is invested in equities to qualify as a flexi cap fund.

Basically, a flexi cap fund is exactly what a multi cap fund used to be earlier before the new rules set in, the only change is in the name.


Difference between multi cap and flexi 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.




Are you investing in the right mutual funds?

Why kotak mutual fund has launched a multi cap fund?

The Securities and Exchange Board of India (SEBI) had on 11/09/2020 issued a circular bringing about changes to fundamental characteristics of Multicap mutual funds.

The regulator believed that most multicap mutual fund schemes were basically large cap schemes in terms of their asset allocation disguised as multi cap funds.


These multicap mutual fund schemes were therefore not true to their label.


"In order to give more flexibility to the mutual funds and taking into account the recommendations of Mutual Fund Advisory Committee (MFAC), a new category named 'Flexi Cap Fund' under equity schemes will be available,"



Most mutual fund houses had raised concern of the necessary investments in mid and small cap stocks.


With mandatory 25% investment into mid and small cap stocks (50 % overall) the new multicap fund structure would have become even more aggressive than a large & mid cap mutual fund scheme.


Mid and small cap stocks are more illiquid than large cap stocks and this would have created the risk of an unnecessary bubble.


Mutual fund houses had the option of converting an existing multicap mutual fund scheme into a flexi cap mutual fund.


SEBI has mentioned in the circular that "Mutual Funds have the option to convert an existing scheme into a Flexi Cap Fund subject to compliance with the requirement for change in fundamental attributes of the scheme in terms of Regulation 18(15A) of SEBI (Mutual Funds) Regulations, 1996,".


Most mutual fund houses decided to convert their existing multi cap schemes into flexi cap schemes which included Kotak mutual fund.

Therefore now Kotak mutual fund has decided to launch a multi cap fund.


List of Multicap funds as on 1st March 2021

Baroda Multicap

BNP Paribas Multicap

ICICI Pru Multicap

Invesco Multicap

ITI Multicap

Mahindra Manulife Multicap

Nippon Multicap

Principal Multicap

Quant Active Multicap

Sundaram Equity Multicap



Should you invest in multicap  mutual funds?

Multicap mutual funds need a minimum of 25% investment into each mid cap and small cap stocks.

This means 50% of the total portfolio at all times will be invested in mid and small cap stocks.

This makes the fund highly aggressive, volatile but at the same potential for higher growth.

Therefore one needs a longer time horizon, ideally 7 years or more since both mid and small cap stocks go through various cycles and need a longer time period for their potential to materialize.

This does come with the caveat of the fund going through volatile phases which is unfortunately when most investors tend to redeem.


     “The equity Market is a Triveni Sangam of Large-cap, Mid-cap and Small cap stocks with each having its own return and risk profiles. At Kotak Mutual Fund, we have added value to our investors by outperforming benchmark indices regularly across most time periods in all three categories – small-cap, mid-cap and large cap-funds and thus, are now offering the power of all 3 in one fund.”

“We follow a disciplined investment process of BMV i.e. by focusing on Business scalability & sustainability, Management Quality and Valuation parameters. We are also committed to the principles of Environmental, Social and Governance (ESG) factors”.

Harsha Upadhyaya, President & CIO – Equity, Kotak Mahindra Asset Management Company 


For portfolio enquiriesemail us with your doubts at info@themutualfundguide.com

Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.  
Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing

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