In the present scenario where valuations are constantly changing, many investors today are looking for mutual funds that deliver risk-adjusted returns, which means how much return the fund has delivered relative to the risk involved in it. This is where multi-cap funds have emerged as an attractive long-term investment instrument in India.
Multi-cap funds invest in large caps, mid caps, and small caps stocks and thereby enable investors to gain exposure to the broader Indian stock market. Below, we will discuss some of the best multi-cap mutual funds that have been providing strong risk-adjusted returns in the past few years.
What makes Multi-Cap Funds unique?
Multi-cap funds are designed to provide long-term capital appreciation by maintaining a dynamic portfolio with at least 25% allocation to large caps, mid caps, and small caps stocks, which is the complete opposite of flexi-cap funds that do not have any limitations on allocations.
The following are some of the top rated multi cap mutual funds that provided strong risk-adjusted returns:
Nippon India Multi Cap Fund
Nippon India Multi Cap Fund is one of the largest funds in this category in terms of assets, with an AUM of over ₹46,321 crore as of March 2026, which is a testimony to the long-term trust that it has earned among Indian investors. The fund has delivered 5 Year absolute returns of 172.99% with a 5 Year CAGR of 22.24%. It has been outperforming the Nifty 50 with a competitive expense ratio of only 0.73 in its direct plan.
The diversification of its portfolio ensures that it is resilient against various market cycles. It invests in several sectors like financial services, consumer goods, industrials, healthcare, and technology.
Kotak Multicap Fund
Kotak Multicap Fund can be regarded as one of the best-performing multi-cap mutual funds in the past few years because its 3-year CAGR has been around 24.73%, while its 3-year absolute return has been 94.04%. The fund has a strong track record in a relatively short period with an AUM of ₹22,095 crore as of March 2026, while its expense ratio is among the lowest at 0.45%.
Being managed with a high conviction, bottom-up stock selection, Kotak Multicap Fund provides a well-balanced portfolio that has consistently captured market upside while managing downside risk effectively, which is one of the main characteristics that distinguish the best multi-cap funds among others.
HSBC Multi Cap Fund
While the HSBC MultiCap Fund was started only three years back, in January 2023, it is already making its mark amongst its contemporaries. Over the last three years, it has provided an impressive absolute return of 90.72%, along with a CAGR of 24.01%. As of March 2026, it currently has a highly competitive expense ratio of 0.63% while having an actively growing AUM of ₹4,800 crore.
Utilising the vast global framework provided by the HSBC Asset Management and adapting it to the Indian equity market, the fund efficiently identifies quality investments across different market capitalisations before they become popular.
Conclusion
Multi-cap funds have emerged as mutual funds that every investor prefers to invest in due to the consistency and stability of the returns generated by them. They offer exposure to the broader equity markets by exploiting the stability of large-cap stocks and the growth of mid-cap and small-cap stocks, which makes multi-cap funds a suitable choice for a large number of investors.
The Multi-cap funds discussed above provide disciplined asset allocation, quality stock selection, and diversification, resulting in stable and consistent returns in the long term. Thus, multi-cap funds offer a balanced and efficient investment option to those investors who aim at making long-term compounding returns instead of short-term returns.
