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Finding Multicap Funds using Morningstar Data

How to locate funds that invest across market-cap spectrums.

Occasionally, our readers ask whether Morningstar offers all-cap categories dedicated to funds that invest across the market-cap spectrum. Such funds, variously called multicap, all-cap, or go-anywhere funds, don't have any specialized categories to call home in Morningstar's system, for key reasons.

 

First, consider the distinction between the terms "multicap" and "go-anywhere." The former implies steady investments in firms of different market-cap sizes. The latter implies that a fund manager can choose to invest heavily in small caps one year and large caps the next, based on where the best opportunities happen to be. Clearly, these are different approaches. For instance, large-blend-oriented  Vanguard Capital Opportunity (VHCOX) has long held significant stakes in large, mid-, and small caps without shifting their weightings much among these market-cap bands. On the hand, another large-blend fund,  Quaker Aggressive Growth (QUAGX), has traveled all over the map: In 1999, 23% of its stock holdings were small cap, dropping to 4% in 2002, then rising to 36% today. The objectives of such funds are likely to be similar, as they are here, making the distinction between multicap and go-anywhere funds tough to determine by mandate. Thus we prefer a holdings-based approach, which provides a more-accurate picture of a fund's leanings.