Canara Robeco Multi Cap Fund: NFO Closes July 21; Should You Buy This Plan?

Canara Robeco Mutual Fund has launched the Canara Robeco Multi Cap Fund, an open-ended equity scheme investing across large, mid, and small-cap stocks. The new fund offer (NFO) runs from July 7 to 21, 2023. It will reopen for subscription around August 4, 2023.

The minimum subscription amount is Rs. 5,000, and subsequent investments in multiples of Re 1. The fund will track the benchmark NIFTY 500 Multicap 50:25:25 Index TRI for performance.

Asset Allocation

The fund will invest in equity and equity-related instruments, allocating a minimum of 25 per cent and a maximum of 50 per cent to each large-cap, mid-cap, and small-cap categories. The total allocation in equity and equity-related instruments, encompassing all three types, will be between 75 per cent and 100 per cent.

During the NFO period, investors can utilise the auto switch facility to switch units from Canara Robeco Mutual Fund's debt schemes. This facility will be processed on the NFO's last date, allowing investors to take advantage of the desired investment option.

The NIFTY500 Multicap 50:25:25 index (fund benchmark) consists of all companies from the NIFTY 500 index, with fixed weights of 50 per cent for large-cap, 25 per cent for mid-cap, and 25 per cent for small-cap segments.

Who Can Consider Investing

Investors seeking long-term capital appreciation and exposure to all three market caps can consider this fund. 
 
Securities and Exchange Board of India (Sebi) mandates a minimum allocation of 25 per cent in each market cap category for multi-cap funds, thus minimising fund manager discretion. Multi-cap funds can go overweight on any of these categories provided they have maintained the minimum allocation of 25 per cent. This approach enhances diversification and minimises risk.

The fund house claims that the multi-cap category has demonstrated the potential to deliver consistent risk-adjusted returns across various market cycles. The multi-cap fund category has achieved an average return of 28.70 per cent for one year ending July 4, 2023.

Investors should know that the Canara Robeco Multi Cap Fund carries a 'Very High Risk' classification due to its primary investment focus on equity instruments. Investors should carefully assess their financial goals and risk tolerance before making any investment decisions in the scheme.