PGIM India Multi Cap Fund: A promising long term investment option in current market conditions

The market is in a consolidation phase after the Trump Administration announced a 90 day pause in counter tariffs. Volatility again gripped the market after the terrorist attack in Pahalgam and subsequent military action. The market recovered from the volatile phase after ceasefire was agreed between the two countries. The market has shown resilience despite US Sovereign rating cut by Moody's. The Sensex is back above the psychologically important 80,000 level.

Valuations have moderated

The deep correction over past several months have brought valuations to reasonable levels across all market capitalization segments (see the graphic below).

Source: National Stock Exchange, Period: 01.09.2024 to 30.04.2025

Why multicap strategy may be useful in current market conditions?

• There is uncertainty in the short to medium term due to rising fiscal deficit in the US. Investing in multi-cap funds can help mitigate risks and position the portfolio for higher long-term returns.


• Winners rotate across market cap segments (see the chart below). Multicap funds can exploit opportunities across different market phases (e.g. volatile market, sideways market, early stage bull market, later stage / ageing bull market etc).
  
  

  

  Source: National Stock Exchange, Advisorkhoj Research



• Lower crude prices and weakening dollar might provide a good base for the market recovery. Repo rate cuts by the RBI is likely to provide legs to the market recovery.
  
  

  

  Source: Bloomberg, Advisorkhoj Research, as on 30^th April 2025



• The chart below shows the 3 year rolling returns of Multicap index versus the broad market index (Nifty 500 TRI) since the inception of the multicap index. You can see that the multicap index has outperformed the broad market index on a fairly consistent basis.
  
  

  

  Source: National Stock Exchange, Advisorkhoj Research, as on 30^th April 2025



• The chart below shows the 3 year returns distribution of multicap index versus the broad market since the inception of the multicap index. The multicap index gave 15%+ CAGR returns in 48% of the observations / instances (versus 39% of the observations / instances for Nifty 500 TRI). Multicap funds have the potential to give higher returns than broad market index over sufficiently long investment tenures across different market conditions.
  
  

  

  Source: National Stock Exchange, Advisorkhoj Research, as on 30^th April 2025



• Lower valuations across market cap segments can provide attractive investment opportunities in a multicap strategy for long term investors.
  
  

  

  Source: National Stock Exchange, Period: 01.09.2024 to 30.04.2025

About PGIM India Multi Cap Fund

PGIM India Multicap Fund was launched in September 2024. This a true to label mulitcap fund with following investment strategy.

Portfolio construction and stock selection philosophy

Limited downside risk for investors

The fund has completed just 8 months. This was a very volatile period for the equity market. Though 8 months is not sufficient time to review a fund's performance, it is encouraging to note that the fund was able to limit downside risks for investors (see the drawdown chart below).

Source: Advisorkhoj Research, as on 22^nd May 2025

Current portfolio positioning

Source: PGIM India MF, as on 30^th April 2025

• 3S framework for stock picking: Scalable, Sustainable, Structural: -


• Scalable: Focus on companies with the potential to continue growing their revenue at an accelerated pace


• Sustainable: Prioritize companies achieving above-average growth at comparatively lower costs as they scale


• Structural: Seek companies with a longer runway for above-average growth and profitability, driven by clear, visible triggers


• The portfolio construction approach is bottoms-up and well-diversified.


• Growth at a Reasonable Price (GARP) focused strategy with flexibility to adjust between short, medium and long-term growth opportunities based on market conditions.


• The fund may allocate to turnaround ideas, event-driven opportunities, and stocks showing momentum driven by earnings growth in the medium to long term.

Who should invest in PGIM India Multi Cap Fund?

• Investors looking for capital appreciation and wealth creation.


• Investors should have at least 5 year investment horizon in this scheme.


• Investors with very high risk appetite.


• Investors can invest in this scheme either through lump sum or Systematic Investment Plan (SIP) depending on your investment needs.


• If you are worried about market volatility, you can invest in lump sum in PGIM India Liquid Fund and transfer fixed amounts through Systematic Transfer Plan (STP) over 3 to 6 months.

Investors should consult their financial advisors or mutual fund distributors if PGIM India Multi Cap Fund is suitable for their long term investment needs.