Axis Multicap Fund has delivered a 4.5% return over the last month, notably ahead of its benchmark's 0.9% performance. The scheme, which manages over ₹10,400 crore, has also sustained a three-year CAGR of 20.3%. While these short-term gains are positive, investors should note the fund's very high-risk classification due to mandatory large, mid, and small-cap exposure.
Axis Multicap Fund has recently emerged as a top performer within the multi-cap mutual fund category. In the last month, the fund generated a 4.5% return, which is significantly higher than the 0.9% return posted by its benchmark, the NIFTY500 Multicap 50:25:25 Total Return Index. This short-term outperformance adds to the fund's existing track record, as it has also maintained a 20.3% compound annual growth rate (CAGR) over the past three years.
To understand why this fund moves the way it does, investors should look at its structure. Under SEBI regulations, multi-cap funds must invest at least 25% of their total assets in each of the three market categories: large-cap, mid-cap, and small-cap stocks. This mandate forces the fund to maintain exposure to smaller companies, which generally carry higher volatility and risk compared to large-cap stocks. Consequently, the fund is officially classified as having a 'very high' risk profile.
When compared to peers, other funds have also seen positive trends. The Aditya Birla SL Multi-Cap Fund recorded a 4.0% return over the same one-month period, while the ICICI Pru Multicap Fund posted a 3.1% gain. While Axis Multicap Fund leads in this specific timeframe, the ICICI Pru Multicap Fund manages a larger corpus, with its assets under management (AUM) standing at approximately ₹18,769 crore compared to the roughly ₹10,457 crore managed by Axis Multicap Fund.
For investors, the recent performance highlights the importance of checking a fund’s long-term consistency rather than just one-month spikes. Because of the mandatory allocation to small and mid-cap stocks, the fund’s value can swing sharply during market downturns. Additionally, investors should be aware of the exit load, which is typically 1% for any units redeemed within 12 months of the investment date. This is designed to discourage short-term trading.
Going forward, the key factor for investors to track is how the fund manager adjusts the portfolio allocation between large, mid, and small-cap stocks to capture gains while managing the inherent risks of the smaller segments. Consistency in beating the benchmark over multiple market cycles, rather than a single month of success, remains the primary measure of a fund's quality.