Canara Robeco's multicap fund can be a good SIP

The new fund offer (NFO) of Canara Robeco Multicap Fund may be a good bet for investors looking to start a systematic investment plan (SIP) in an equity scheme handled by a strong fund management team, said wealth planners. Investors must, however, avoid lump sum investments at this juncture with the market valuations considered rich at current levels.

The NFO of Canara Robeco Multicap Fund, which will invest in a mix of large-, mid- and small-cap stocks, will close on July 21. It will be managed by Shridatta Bhandwaldar and Vishal Mishra.

"The fund house has an experienced team with a good track record. Several of its schemes have rewarded investors well over the last five years and investors can use the SIP mode to invest," said Abhay Mathure, a Mumbai-based mutual fund distributor.


Financial planners believe equity investors with a time frame upwards of five years could consider multi-cap funds. As per regulatory requirements, multi-cap funds need to have a minimum allocation of 25% each in large, mid- and small-cap stocks with the remaining 25% at the discretion of the fund manager.

"Multi-cap funds offer a diversified portfolio, which helps reduce risk. This is because different market capitalisations can perform differently at different times, so by investing across all three, you can help to minimise your losses if one segment of the market underperforms," said Viral Bhatt, founder of Money Mantra. Bhatt believes retail investors looking to build their equity portfolio can allocate through the SIP mode.

The scheme will have a diversified equity portfolio of 40-50 stocks spread across large-, mid- and small-cap stocks.

"There are several multi-cap funds, with an existing track record and investors should wait for the scheme to build a track record," said Juzer Gabajiwala, director of Ventura Securities.