SBI Multicap Fund: Strong performance recovery

Current market context

The volatility in the market in the past four months following the weaker than expected corporate earnings, coupled with INR depreciation and concerns about trade policies of the Trump Administration have led to heavy Foreign Institutional Investor (FII) sell-off. Nifty 50 has corrected by more than 12% from its 52-week high. Market has since recovered after President Trump announced a 90 day pause in retaliatory tariffs, with the Nifty trading above the 24,000 level despite the tense situation following the terrorist attack in Kashmir.

Valuations have eased

The deep correction in last quarter dragged midcap and small cap stocks into the bear market zone as the Nifty Midcap 150 TRI and Nifty Small Cap 250 TRI fell by more than 20% from its 52-week highs. The sharp correction has brought valuation to reasonable levels (see the chart below) has eased valuations across different market cap segments, bringing them to more reasonable levels. Current valuation scenario can provide attractive investment opportunities in a multicap strategy. In this article, we will review the SBI Multicap Fund, which is currently the top performing Multicap Fund.

Source: National Stock Exchange, Advisorkhoj Research as on 31^st March 2025

Why multicap strategy for long term investors?

Multicap strategy has the potential of generating higher returns compared to broad market indices. The chart below shows the 5 year returns distribution of Multicap index versus other broad market indices like Nifty 500 TRI and Nifty 50 TRI since the inception of the Multicap index. You can see that, based on historical returns, the probability of getting higher returns (15%+ CAGR returns) is significantly higher for Multicap.

Source: National Stock Exchange, Advisorkhoj Research as on 31^st March 2025

SBI Multicap fund: Regular Growth Plan

The SBI Multicap Fund with an AUM of Rs 19,192.41 Crores as on 31^st March 2025 is managed by Fund managers Mr. R. Srinivasan and Mr. Saurabh Pant. This is an open-ended equity scheme investing across large cap, mid cap, small cap stocks with the benchmark NIFTY 500 Multicap 50:25:25 TRI. Multicap Funds are required to invest minimum 25% of their assets in each of the three market cap segments viz. large cap, midcap and small cap. The fund completed 3 years in March 2025.

Limited downside risks for investors

The chart below shows the drawdowns of SBI Multicap Fund versus the benchmark, Nifty500 Multicap 50:25:25 TRI since the inception of the fund. You can see the fund was able to limit downside risk for investors most of the time. The maximum fund drawdown over the period was -15% versus -20% for the benchmark

Source: Advisorkhoj Research as on 31^st March 2025

Lower volatility compared to peers

Standard deviation is a measure of a fund’s volatility. We compared the standard deviations of all funds in the multicap category (which have completed at least 3 years). SBI Multicap Fund (in blue) the lowest volatility compared to its peers.

Source: Advisorkhoj Research as on 31^st March 2025

Lower systematic risks

Beta is a measure of systematic risks. We compared the betas of all funds in the midcap category (which have completed at least 3 years). SBI Multicap Fund the lowest beta compared to its peers.

Source: Advisorkhoj Research as on 31^st March 2025

Risk adjusted returns

Market capture ratio is a measure of the performance of a mutual fund scheme relative to its benchmark index in rising and falling markets. Up Market Capture Ratio tells us how much percentage of the market’s upside was captured by the fund, while Down Market Capture Ratio tells us how much percentage of the market’s downside was arrested by the fund. Up Market Capture Ratio and Down-Market Capture ratio can give us a sense of risk adjusted returns. We looked at the market capture ratios of SBI Multicap Fund over the past 1 year.

The Up Market Capture Ratio of SBI Multicap Fund over the last 1 year was 108% which implies that if the benchmark index went up by 1% in a month, then the scheme’s Net Asset Value (NAV) went up by 1.08%. The Down-Market Capture Ratio of the fund was 76% which implies that if the benchmark index went down by 1% in a month, then the scheme’s Net Asset Value (NAV) went down by 0.76%. The market capture ratios of SBI Multicap Fund are a clear indication of the potential of the fund to give superior risk adjusted returns.

Strong performance recovery

The fund went through a period of underperformance, but has made a strong come back in in the last few quarters. The fund has been in the top two quartiles for the last three successive quarters in difficult market conditions. Almost all funds may go through a period of underperformance for a variety of reasons, but making a strong performance recovery is the hallmark of well managed funds.

Source: Advisorkhoj Research as on 31^st March 2025

Risk adjusted returns

• Unconstrained, sector agnostic approach


• Active Stock Management with Bottom-up strategy


• High Conviction Play through Analyst Portfolio


• Style Agnostic with broader opportunity set for stock selection


• Strong pedigree of Investment Expertise across market cap

Current portfolio positioning

Source: Fund Factsheet as on 31^st March 2025

Low overlap with other SBI MF equity funds

The table below shows the portfolio overlap of SBI Multicap Fund with other SBI MF diversified equity funds. You can see that the multicap fund has low overlap with other funds. You can build a well-diversified portfolio of the equity funds using SBI Multicap Fund and other SBI MF diversified equity funds.

Source: Advisorkhoj Research as on 31^st March 2025

Who should invest in SBI Multicap Fund?

• Investors who are looking for capital appreciation over long investment horizon


• Investors with high to very high-risk appetites


• Investors with minimum 5 years investment horizon


• You can invest in this scheme either in lump sum or SIP depending on your investment needs

Consult a financial advisor or mutual fund distributor to see if SBI Multicap Fund is suitable for your investment needs.