Multi-Cap

A multi-cap ETF is a type of ETF that invests in several market capitalization ranges. These generally include large-cap, mid-cap, and small-cap stocks. A multi-cap fund provides investors with exposure to a range of companies with different market capitalizations, which may potentially reduce risks associated with being concentrated in one type of market cap. However, small & mid-cap stocks are often more volatile than large-cap stocks.

Multi-cap exchange traded funds’ allocation of assets across different market capitalization ranges varies, depending upon the investment strategy of the fund manager. For example, may be a bias towards one market-cap, or the advisor may seek balance, depending on a fund’s objective and strategy.