What is Multi Cap PMS?
Multi Cap PMS strategies maintain a minimum 25% allocation each to large cap, mid cap, and small cap stocks (with the remaining 25% flexible). This ensures balanced exposure across market capitalisation segments, combining the stability of large caps with the growth potential of mid and small caps.
- Structured Diversification: Mandatory minimum allocation to all cap segments
- Best of All Worlds: Stability from large caps + alpha from mid+small caps
- SEBI Defined: Clear market cap allocation norms for transparency
- 25-25-25 Rule: At least 25% each in large, mid, and small cap
- Remaining 25%: Flexible — allocated to highest conviction opportunity
Multi Cap Allocation Dynamics
How multi cap strategies navigate different market environments:
- Bull Market: Overweight small+mid cap (flexible 25%) for maximum alpha
- Bear/Volatile: Shift flexible allocation to large caps for protection
- Mid-cycle: Balanced allocation stays close to equal-weight across caps
- Factor overlay: Some managers apply quality or momentum filters within each segment
- Rebalancing: Quarterly review to maintain minimum allocation requirements