What Is the Best Multicap Fund to Invest in Right Now? A SafalCheck™ Analysis

The best multicap fund to invest in as of August 2026, based on SafalCheck™'s 7-factor analysis, is Kotak Multicap Fund (Direct Plan) - which leads the category on risk-adjusted performance, cost efficiency, and manager stability simultaneously. Nippon India Multi Cap Fund (Direct) is the largest fund in the category by AUM and scores well on consistency and downside protection, making it the stronger choice for investors who prioritise a longer, proven track record. The right answer for your portfolio depends on which factors matter most to your investment situation - this article walks through the SafalCheck™ comparison so you can read the data rather than take a ranking at face value.

All data in this analysis is based on AMC factsheets and AMFI disclosures as of July 2026 month-end. Performance figures are sourced from AMC factsheets and recognised data providers.

Why the "Best Multicap Fund" Is Not a Single Universal Answer

Before the comparison, a necessary framing: the multicap category requires every fund to maintain the same SEBI-mandated 25-25-25 minimum allocation. This means the category structure is similar across all multicap funds - but what differs significantly is execution: how the fund manager uses the 25% discretionary allocation, the quality and concentration of stock selection within each segment, the cost structure, and how the fund behaves during market drawdowns.

SafalCheck™ evaluates all of these dimensions. The fund that tops the SafalCheck™ ranking is the one that scores most consistently across all 7 factors - not just the one with the highest recent return or the largest AUM. A fund with a high 3-year return but a recent manager change, rising TER, and concentrated smallcap portfolio will score lower overall than a fund with a slightly lower 3-year return but structural consistency across all factors.

The Multicap Category Landscape as of August 2026

The multicap category as of August 2026 includes funds from all major AMCs - Nippon India, Kotak, ICICI Prudential, HDFC, SBI, Mahindra Manulife, Axis, and others. The category's total AUM has grown to approximately ₹2.23 lakh crore, reflecting strong investor interest in the all-cap diversification structure.

By AUM, the category is led by Nippon India Multi Cap Fund at approximately ₹54,585 crore, followed by Kotak Multicap Fund at ₹28,074 crore and ICICI Prudential Multicap Fund at ₹18,194 crore. AUM size is not a primary quality factor in SafalCheck™ - but it is worth noting as context, because very large AUM creates structural challenges in the smallcap portion of the portfolio.

The five funds most commonly evaluated by SafalMoney investors through SafalCheck™ in July 2026 were: Kotak Multicap Fund, Nippon India Multi Cap Fund, ICICI Prudential Multicap Fund, HDFC Multi Cap Fund, and Mahindra Manulife Multi Cap Fund. The analysis below focuses on these five.

SafalCheck™ Factor-by-Factor Comparison: Top 5 Multicap Funds

Factor 1: Risk-Adjusted Performance (Rolling Sharpe)

Kotak Multicap Fund has delivered a CAGR of over 19% since its September 2021 launch, significantly outperforming its benchmark Nifty 500 Multicap 50:25:25 TRI, which returned 14.48% CAGR over the same period. Its Sharpe Ratio of 1.01 and standard deviation of 15.29% reflect superior risk-adjusted performance relative to the benchmark and category peers.

Nippon India Multi Cap Fund delivered a 3-year return of 17.4% and 5-year return of 19.7% - a longer track record that spans multiple market cycles, including the 2020 COVID crash recovery. Its 5-year return is competitive, and the consistency of that return across a full market cycle is a meaningful quality signal.

ICICI Prudential Multicap Fund delivered 18.5% over 3 years and 16.6% over 5 years. HDFC Multi Cap Fund delivered 15.4% over 3 years and a negative 1-year return of -0.4% as of July 2026 - the weakest 1-year performance in the peer group, which warrants monitoring.

SafalCheck™ Risk-Adjusted Performance Score (highest to lowest): Kotak → Mahindra Manulife → ICICI Prudential → Nippon India → HDFC

Factor 2: Consistency Across Market Cycles

Nippon India Multi Cap Fund has the longest track record in the category - over 21 years - and its performance record spans multiple complete market cycles. This gives it a meaningful advantage on the consistency factor, where SafalCheck™ evaluates calendar-year category-relative performance across the last 5 years. Nippon India's track record includes periods of mid-cycle leadership and periods of underperformance - but the overall pattern across full cycles is consistent.

Kotak Multicap Fund launched in September 2021, which means it has a shorter track record to evaluate for full-cycle consistency. The 2022 bear market, the 2023 recovery, and the 2024–25 mid-smallcap rally are all captured - but the full 5-year consistency picture is shorter than peers with longer histories.

SafalCheck™ Consistency Score (highest to lowest): Nippon India → ICICI Prudential → Mahindra Manulife → Kotak → HDFC

Factor 3: Portfolio Quality and Concentration

Kotak Multicap Fund follows a disciplined multicap mandate allocating 25–50% each to large, mid, and small caps, with a portfolio turnover ratio of 39.20% - indicating active but not hyperactive stock rotation. The fund invests in sectoral leaders with a focus on earnings visibility, resulting in a quality-oriented portfolio rather than a momentum-driven one.

Nippon India Multi Cap Fund, at ₹54,585 crore AUM, faces inherent portfolio quality challenges in its smallcap allocation - the fund is large enough that meaningful smallcap positions require either accepting lower-quality smallcap names or spreading across a very large number of smallcap stocks, both of which carry portfolio quality trade-offs.

SafalCheck™ Portfolio Quality Score (highest to lowest): Kotak → Mahindra Manulife → ICICI Prudential → Nippon India → HDFC

Factor 4: Cost Efficiency

Kotak Multicap Fund charges a direct plan expense ratio of 0.5%, Mahindra Manulife Multi Cap Fund charges 0.5%, Axis Multicap Fund charges 0.7%, Nippon India Multi Cap Fund charges 0.7%, and ICICI Prudential Multicap Fund charges 0.9%.

The cost efficiency factor in SafalCheck™ evaluates not just the current TER but the TER trend over the last 3 years. Funds that have maintained stable or declining TERs as AUM grew score better than funds where TER has crept upward. In the multicap category, the 0.5% TER funds are structurally advantaged on compounding - the difference between 0.5% and 0.9% compounded over 15 years is a meaningful real-money gap in final corpus.

SafalCheck™ Cost Efficiency Score (highest to lowest): Kotak (tied) → Mahindra Manulife (tied) → Nippon India → Axis → ICICI Prudential

Factor 5: Fund Manager Stability

Kotak Multicap Fund has been jointly managed by Devender Singhal and Abhishek Bisen since its launch in September 2021 - stable management for the fund's full operating history. Nippon India Multi Cap Fund has experienced manager transitions over its 21-year history, as would be expected for any fund with that age - the question for the stability score is whether the current manager team has been in place for long enough to own the current portfolio. Mahindra Manulife Multi Cap Fund has also maintained consistent management.

SafalCheck™ Manager Stability Score (highest to lowest): Kotak → Mahindra Manulife → Nippon India → ICICI Prudential → HDFC

Factor 6: Category-Relative Ranking

Category-relative ranking across multiple metrics - return, Sharpe, consistency - places Kotak and Nippon India consistently in the top half of the multicap peer group. HDFC Multi Cap Fund's negative 1-year return (-0.4% as of July 2026) positions it at the bottom of the peer group on recent category-relative performance, though its longer 3 and 5-year track record is more representative.

SafalCheck™ Category-Relative Ranking Score (highest to lowest): Kotak → Mahindra Manulife → ICICI Prudential → Nippon India → HDFC

Factor 7: Downside Protection During Drawdowns

The mandatory 25% smallcap allocation in all multicap funds means every fund in the category absorbs significant smallcap drawdowns during bear markets - this is a structural feature of the category, not a differentiator. The differentiation comes from how each fund's smallcap and midcap selection performs relative to the category during drawdowns.

Nippon India Multi Cap Fund's longer history gives it the most comprehensive drawdown record - including the 2020 COVID crash, the 2022 bear market, and the 2024 mid-smallcap correction. Its behaviour in those periods is well-documented and scores solidly. Kotak Multicap Fund's drawdown history is shorter, limited to the 2022 bear market and the 2024 correction - both managed well but over a shorter test period.

SafalCheck™ Downside Protection Score (highest to lowest): Nippon India → ICICI Prudential → Mahindra Manulife → Kotak → HDFC

Overall SafalCheck™ Verdict: Which Multicap Fund Scores Highest?

Combining all 7 factors:

Kotak Multicap Fund (Direct) leads the overall SafalCheck™ composite score - driven by strong risk-adjusted performance, industry-leading cost efficiency at 0.5% TER, stable management, and quality portfolio construction. The one caution: the fund has a shorter track record than peers, which slightly limits the consistency and downside protection scores compared to what they could be with more history.

Nippon India Multi Cap Fund (Direct) is the strongest choice if full-cycle consistency and downside protection history are your priority factors. Its 21-year track record, competitive 5-year CAGR of 19.7%, and well-documented behaviour across multiple bear markets give it an edge on those two specific factors. The trade-offs are the higher TER (0.7% vs Kotak's 0.5%) and the AUM-related smallcap portfolio challenges at its current scale.

Mahindra Manulife Multi Cap Fund (Direct) is an underappreciated option - competitive TER at 0.5%, consistent category-relative performance, and stable management. At ₹6,926 crore AUM, it is large enough to be well-run but small enough to deploy smallcap capital efficiently. Worth running through SafalCheck™ in full if you are comparing options in this category.

ICICI Prudential Multicap Fund (Direct) scores in the middle of the peer group - decent performance, acceptable TER, but the 0.9% expense ratio is the highest in the top-5 peer group and creates a persistent compounding drag.

HDFC Multi Cap Fund (Direct) requires monitoring - the negative 1-year return and below-peer 3-year return require explanation before investing fresh capital.

The Investment Decision: Kotak vs Nippon for a New Investor in August 2026

For a new investor choosing between the two leading funds:

Choose Kotak Multicap Fund (Direct) if: you are starting a fresh SIP, prioritise cost efficiency, and are comfortable with the fund's shorter 5-year track record. The 0.5% TER, strong Sharpe ratio, and quality portfolio construction make it the structurally strongest choice on SafalCheck™'s composite score.

Choose Nippon India Multi Cap Fund (Direct) if: you want the longest available track record in the category spanning multiple market cycles, and are comfortable paying a 0.7% TER for that history. The fund's behaviour through the 2020 crash and recovery is well-documented - for risk-conscious investors who want to understand how a fund behaves in genuine bear markets before investing, that track record has real value.

Both are quality options. The SafalCheck™ recommendation is to analyse both using the full tool before making your final decision - the factor breakdown often surfaces one detail, whether about portfolio concentration, TER trend, or manager record, that tips the decision in your specific situation.