UTI Launches New Multi Cap Fund with Diversified Approach
UTI Mutual Fund has introduced its latest offering – the UTI Multi Cap Fund. This open-ended equity scheme will strategically invest across large-cap, mid-cap, and small-cap stocks, providing investors with diversified market exposure.
Key Details:
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NFO Period: April 29 – May 13, 2025
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Minimum Investment: ₹1,000 (with ₹1 multiples thereafter)
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Portfolio Allocation: At least 25% in each market segment
Investment Strategy:
The fund will employ a blend strategy, focusing on:
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Sustainable businesses with strong fundamentals
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Reasonably valued growth opportunities
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Turnaround potential in select companies
Moreover, it will utilize UTI’s proprietary Score Alpha framework for stock selection, analyzing:
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Operating cash flows
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Return ratios
However, investors should note this active approach may result in higher portfolio turnover as allocations adjust to market shifts.
Multi Cap vs. Flexi Cap: Key Differences
Multi-Cap Funds
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Structure: Mandatory 25% allocation across all market caps
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Advantages:
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Diversification across market segments
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Potential for higher growth during bull markets
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Risks:
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Higher volatility during downturns
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Limited flexibility for tactical adjustments
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Flexi-Cap Funds
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Structure: No allocation restrictions
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Advantages:
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Dynamic portfolio adjustments
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Potentially lower risk in volatile markets
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Risks:
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Heavy reliance on manager’s market timing
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Possible underperformance if allocations miss trends
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Performance Comparison & Expert Insights
Recent Returns:
| Fund Type | 3-Year Return | 5-Year Return |
|---|---|---|
| Multi-Cap | 15% | N/A |
| Flexi-Cap | 12% | 21% |
| Sensex | 9% | – |
Market Behavior Analysis:
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During upswings: Multi-cap funds outperform (15% vs 12%)
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During downturns: Multi-caps show steeper declines
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Long-term: Flexi-caps deliver stronger 5-year returns (21%)
Expert Perspective:
“While multi-cap funds ensure diversification, their mandatory allocations limit tactical adjustments,” explains Ash Sedani of 1 Finance. “Conversely, flexi-caps offer complete allocation freedom, allowing managers to capitalize on emerging trends.”
Investment Recommendations
For Moderate Risk-Takers:
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Flexi-cap funds
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Benefits: Dynamic allocation balances growth and risk
For Aggressive Investors:
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Multi-cap funds
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Benefits: Higher bull market returns
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Caution: Prepare for volatility
For Conservative Investors:
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Index funds
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Benefits: Low-cost, stable returns
How equity fund categories performed across market phases
| Market Phase | Index Funds (Sensex) | Flexi-cap Funds | Multi-cap Funds |
|---|---|---|---|
| Rising markets | |||
| Apr 30, 2021 – Oct 31, 2021 | 21.6% | 24.1% | 28.5% (Best) |
| Feb 28, 2023 – Jul 31, 2023 | 12.8% | 18.0% | 20.6% (Best) |
| Jan 31, 2024 – Apr 30, 2024 | 3.8% | 5.7% (Best) | 5.4% |
| May 31, 2024 – Sep 30, 2024 | 14.0% | 16.6% | 17.5% (Best) |
| Falling markets | |||
| Mar 31, 2022 – Jun 30, 2022 | -9.5% (Least fall) | -11.0% | -11.2% |
| Nov 30, 2024 – Feb 28, 2025 | -8.3% (Least fall) | -13.8% | -15.5% (Worst) |
Key Takeaways
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Multi-caps excel in rallies but fall sharply in corrections
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Flexi-caps provide balanced risk-reward
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Index funds offer stability during downturns