A multi cap fund is one that invests across large cap, mid cap and small cap stocks. Such funds are mandated to invest at least 65 per cent of the corpus in equity & equity related instruments. Promising multi cap funds are the top rated multi cap funds giving good returns.

1. Investor can take advantage of investing in large, mid & small caps if he doesn't want to have a fund in each of these 3 categories
2. Ability to deliver substantial returns during a bull run & could outperform even a pure large-cap or mid-cap fund
3. Suitable for investors who are willing to take moderate risk, who want to have stable returns by investing in large & giant companies but at the same time would want to expose some of their portfolio for mid & small cap too to attain better returns
4. Rebalancing across market caps is available at a lower cost since switching amongst large, mid and small cap mutual funds may involve exit load & capital gains taxation
5. Gains on equity funds are subject to taxation @ 15% for holding period less than 1 year and @ 10% for more than a year if gains are more than 1 lakh