The fund house said the Nifty500 Multicap 50:25:25 Total Returns Index (TRI) fell 2.9% year-to-date as of May 29, compared with declines of 4.8% in the Nifty 500 TRI and 9.6% in the Nifty 50 TRI.
The multicap benchmark also outperformed over a one-year period, delivering a return of 1.4%, against 0.3% for the Nifty 500 TRI, while the Nifty 50 TRI was down 3.8%, according to the analysis.
The index’s performance is notable because it combined better returns with lower drawdowns during the correction, suggesting investors did not have to trade downside protection for higher returns.
Bajaj Finserv attributed the resilience to the benchmark’s construction, which maintains a fixed allocation of 50% in large-cap stocks, 25% in mid-caps and 25% in small-caps, ensuring exposure across market segments regardless of shifts in market capitalisation.
Despite the performance, investor flows into multicap funds have remained overshadowed by more popular categories. However, multicap funds still ranked among the top five equity fund categories by cumulative inflows over the past year and recorded positive net inflows every month, with monthly investments ranging from about ₹1,900 crore to ₹3,900 crore, the note said.
The divergence between investor flows and benchmark performance suggests that one of the market’s quieter corners has delivered stronger and more resilient returns than the indices that typically command the most attention.
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