The quiet outperformer in Indian Equities
When investors discuss equity benchmarks in India, the focus is typically on the Nifty 50 or, increasingly, the broader Nifty 500. However, a less-discussed index, the Nifty500 Multicap 50:25:25 TRI (Nifty Multicap) has quietly outperformed both benchmarks across recent time periods while also demonstrating lower drawdowns.
As of 29 May 2026, the Nifty Multicap delivered, -2.9% YTD, and 1.4% over one year, compared with -4.8%, and 0.3% for the Nifty 500 TRI and -9.6%, and -3.8% for the Nifty 50 TRI, respectively.
What makes the performance noteworthy is its consistency. The benchmark outperformed both the Nifty 500 and Nifty 50 during the recent market recovery while simultaneously experiencing smaller drawdowns during the correction. The year-to-date decline of 2.9% compares favourably with 4.8% for the Nifty 500 and 9.6% for the Nifty 50, suggesting that investors did not have to sacrifice downside protection to achieve superior returns.
The index's construction is a key differentiator. Unlike market-cap-weighted benchmarks, it maintains a strategic allocation of 50% large caps, 25% mid-caps and 25% small caps, ensuring consistent exposure to segments of the market that are often underrepresented in traditional benchmarks.
Inflows suggest the category remains underappreciated
Despite this performance profile, investor flows indicate that multicap funds remain overshadowed by more popular categories. Over the past year, investor preference has been skewed towards flexi-cap funds and higher-beta categories such as mid-cap and small-cap funds.
Nevertheless, multicap funds have remained among the top five equity categories by cumulative inflows and have generated positive net inflows every month over the past year. Monthly inflows generally ranged between Rs 1,900 crore and ~Rs 3,900 crore, highlighting a steady demand for diversified exposure across market-cap segments even as investor attention gravitated elsewhere.
The contrast is striking. While flows have favoured more fashionable categories, the benchmark underpinning the multicap segment has quietly delivered superior returns and lower drawdowns than the indices that dominate investor mindshare.
Leveraging the underdog benchmark: Bajaj Finserv Multi Cap Fund
The Bajaj Finserv Multi Cap Fund, benchmarked against the Nifty Multicap, has seen its AUM grow from Rs 696 crore in May 2025 to Rs ~1,317 crore in May 2026, reflecting strong investor acceptance in the past year.
Further, the portfolio has evolved meaningfully over the past year. Exposure to financials has moderated, while allocations to pharmaceuticals, telecom, industrials, auto components and defence-linked businesses have increased. The fund also maintains a differentiated portfolio versus the benchmark through holdings such as Schaeffler India, Neuland Laboratories, MTAR Technologies and Bharat Dynamics.
Against this backdrop, the fund delivered 1.14% YTD, and 6.07% over one year, compared with benchmark returns of -2.9%, and 1.43%, respectively. The fund's relative performance versus the benchmark shows how the fund’s active stock selection and sector positioning have added value beyond the strong underlying performance already delivered by the Nifty Multicap index.
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