Flexi Cap Funds Get ₹6,702 Crore in September. What Are HDFC, Parag Parikh and ICICI Pru Buying?

Flexi-cap mutual funds attracted ₹6,702 crore in September 2026, a 32.5% increase from August, despite weakness in the equity market. Interestingly, the 3 schemes receiving the highest estimated inflows all delivered negative returns during the month.

HDFC Flexi Cap Fund, Parag Parikh Flexi Cap Fund and ICICI Prudential Flexi Cap Fund collectively attracted estimated inflows of nearly ₹3,400 crore. However, their investment decisions were very different.

HDFC increased its investments in major banks, Parag Parikh substantially expanded its holding in DLF, while ICICI Prudential added to automobile companies. These differences raise an important question for investors. How can 3 mutual funds belonging to the same category invest so differently, and what does that mean for their returns and risks?

Why Did Flexi Cap Mutual Fund Inflows Rise in September 2026?

According to the Association of Mutual Funds in India, flexi-cap funds received net inflows of ₹6,701.80 crore in September, compared with ₹5,059.42 crore in August. This represents an increase of approximately 32.5% in just 1 month.

The increase came as equity mutual funds collectively attracted ₹38,306.55 crore in September. Monthly SIP contributions also reached approximately ₹32,490 crore, reflecting continued participation in mutual funds despite market volatility.

One potential reason for the popularity of flexi-cap funds is the flexibility they offer fund managers. Unlike large-cap or small-cap funds, which focus on specific company sizes, flexi-cap funds can invest across large, mid and small companies without having to maintain a fixed minimum in each category.

For example, if smaller companies become expensive, a flexi-cap fund manager can reduce their exposure and increase investments in larger companies. Similarly, when attractive opportunities emerge among smaller businesses, the manager can increase investments in those companies.

This flexibility can help managers respond to changing market conditions. However, it does not guarantee that the fund will outperform or protect investors from market declines.

Which Flexi Cap Funds Received the Highest Inflows in September?

HDFC recorded the strongest increase in estimated inflows among these schemes, while Parag Parikh and ICICI Prudential received less money than in August. Another interesting detail is that all 3 funds generated negative monthly returns. Yet investors continued allocating capital to them.

The individual fund inflows in the table are estimates calculated using changes in assets under management and monthly returns. They should not be treated as official scheme-level subscription figures published by AMFI.

How Can Mutual Funds Receive Inflows Despite Falling AUM?

AUM, or assets under management, represents the total value of investments managed by a mutual fund. It changes because of fresh investments, redemptions and movements in the prices of the securities held by the scheme.

Consider HDFC Flexi Cap Fund. Its AUM declined from approximately ₹1,13,606 crore in August to ₹1,08,547 crore in September. Yet the scheme received estimated net inflows of ₹1,634 crore during the month. The reason is that the decline in the market value of its portfolio more than offset the estimated money entering the fund.

This distinction is important because a decline in AUM does not necessarily mean investors are withdrawing money. Similarly, an increase in AUM does not automatically mean investors are making fresh investments.

What Did HDFC Flexi Cap Fund Buy in September 2026?

HDFC Flexi Cap Fund attracted the highest estimated inflows among the 3 schemes in September. The fund maintained a strong preference for large companies, with approximately 69.93% of its portfolio invested in large-cap stocks. Mid-cap companies accounted for 14.51%, while small-cap stocks represented 9.84%. However, the more interesting development was the fund's continued investment in major Indian banks.

HDFC Flexi Cap Increased Holdings in Major Banks

An August-to-September portfolio comparison shows that the fund increased its shareholding in several banks.

Besides these purchases, the fund continued holding substantial positions in Axis Bank and State Bank of India. ICICI Bank accounted for 8.80% of the portfolio, Axis Bank represented 6.11%, HDFC Bank contributed 6.03%, SBI accounted for 3.94%, and Kotak Mahindra Bank represented 3.40%.

Together, these 5 banking stocks represented approximately 28.28% of the fund's assets. This means that a significant part of the fund's performance depends on the Indian banking sector.

Why Is HDFC Flexi Cap Investing So Much in Banks?

Banks benefit when businesses and individuals borrow more, provided lending remains profitable and borrowers repay their loans. Their earnings can also improve when loan growth, funding costs and asset quality move in a favourable direction.

However, banking stocks face risks from rising loan defaults, changing interest rates, slower credit growth and pressure on profit margins.

The September portfolio shows that the HDFC fund manager continued allocating substantial capital to banking companies. It does not, however, prove the manager's exact reasons for each purchase.

For investors, the important observation is that HDFC Flexi Cap is not equally exposed to all sectors. Banking remains a major part of its portfolio.

Why Did ICICI Bank's Portfolio Weight Fall Despite More Buying?

An interesting detail emerges from HDFC Flexi Cap's ICICI Bank holding.

The fund purchased an additional 4 lakh ICICI Bank shares during September. Despite this, the stock's portfolio weight declined from approximately 9.19% in August to 8.80% in September.

This happens because portfolio weight depends on the market value of a stock relative to the total value of the fund.

Even if the fund manager purchases more shares, the stock's percentage allocation can fall if its price declines relative to the rest of the portfolio.

This is why investors should compare the number of shares held across months instead of assuming that every decline in portfolio weight means the fund manager has sold shares.

What Did Parag Parikh Flexi Cap Fund Buy and Sell in September?

Parag Parikh Flexi Cap Fund received estimated inflows of ₹900 crore in September, compared with ₹1,099 crore in August.

Its AUM declined from approximately ₹1,47,405 crore to ₹1,45,070 crore. However, the fund recorded a smaller monthly decline than HDFC and ICICI Prudential, with a September return of -2.19%.

The most notable portfolio development was its substantial investment in real estate company DLF.

Parag Parikh Substantially Increased Its DLF Holding

According to the official PPFAS Mutual Fund factsheets, DLF represented approximately 0.64% of the fund's assets in August. By September, the allocation had increased to 2.45%. The fund's holding increased from approximately 1.37 crore shares in August to around 5.28 crore shares in September. This represents an addition of roughly 3.9 crore shares during the month.

Importantly, DLF was not an entirely new investment in September. The fund had already established a position in August and substantially expanded it the following month.

According to the AMC's official September factsheet, DLF was its largest addition, with the incremental purchase equivalent to approximately 1.81% of the fund's assets. For investors, this is a more meaningful signal than simply observing an increase in portfolio weight. It confirms that the fund manager actually increased the number of shares held.

What Could Explain the Interest in DLF?

DLF operates in the real estate sector, where business performance is influenced by property demand, project launches, customer bookings and the timing of construction and deliveries.

Unlike banks, which primarily generate income from lending activities, real estate developers depend significantly on their ability to develop and sell properties at profitable prices.

DLF also has a commercial property business that generates rental income, adding another source of earnings.

A larger DLF holding gives Parag Parikh greater exposure to these real estate business drivers. However, the portfolio change alone does not establish why the fund manager increased the investment or whether DLF is attractively valued.

Which Other Stocks Did Parag Parikh Increase?

The September factsheet also identifies additional purchases in several companies.

The fund also exited its position in Great Eastern Shipping during September.

These changes show that Parag Parikh was adjusting exposures across multiple businesses rather than investing all its additional capital in 1 sector.

Parag Parikh Also Maintains International Investments

One of the biggest differences between Parag Parikh and the other 2 schemes is its exposure to international companies.

As of September 30, approximately 11.90% of the fund's assets were invested in 4 international stocks.

These investments provide exposure to global technology and digital businesses that are not fully represented in the Indian stock market.

However, investing internationally introduces additional risks. Returns in Indian rupees depend not only on how these companies perform but also on movements in currency exchange rates.

Parag Parikh also maintained exposure to debt and money-market instruments.

This creates a different portfolio structure compared with a fund invested almost entirely in Indian equities. Nevertheless, its relatively smaller decline in September should not automatically be attributed to any single holding or asset class without a detailed performance attribution.

What Did ICICI Prudential Flexi Cap Fund Buy in September 2026?

ICICI Prudential Flexi Cap Fund received estimated net inflows of ₹862 crore in September, compared with ₹1,091 crore in August.

Its AUM declined from approximately ₹25,895 crore to ₹25,141 crore, while the fund recorded a monthly return of -6.24%.

Two characteristics stand out in its September portfolio. The fund maintained considerably more small-cap exposure than the other 2 schemes and held substantial investments in automobile companies.

ICICI Prudential Has Greater Small Cap Exposure

According to the ACE MF-based September portfolio classification, small-cap stocks accounted for 23.02% of ICICI Prudential Flexi Cap Fund.

This compared with 9.84% for HDFC Flexi Cap and just 4.16% for Parag Parikh Flexi Cap.

Small companies can potentially grow faster than larger, more established businesses. However, their stock prices can also fluctuate sharply because of changing earnings expectations, valuations and trading liquidity.

During periods of market stress, investors may find that smaller companies experience steeper price declines or are more difficult to trade in large quantities.

Therefore, the fund's relatively higher small-cap allocation is an important characteristic for investors to understand. It does not, by itself, explain the scheme's entire September decline.

ICICI Prudential Increased Investments in Automobile Companies

The September portfolio also shows additional buying in major automobile manufacturers.

TVS Motor was the scheme's largest individual holding, accounting for 9.51% of its portfolio.

Maruti Suzuki and Mahindra & Mahindra were also significant investments. Together, these 3 automobile companies accounted for approximately 17.45% of the fund's total assets.

The broader automobile-related sector exposure was approximately one-quarter of the portfolio under the reported sector classification.

This is important because automobile companies depend on consumer demand, financing availability, vehicle sales, input costs and competition.

Strong vehicle demand can help manufacturers increase production, revenue and profits. However, weaker demand, rising raw-material costs or aggressive competition can affect profitability.

For investors, the important question is how much of the fund's performance depends on a particular industry rather than whether a particular stock was purchased during 1 month.

HDFC vs Parag Parikh vs ICICI Pru Flexi Cap Funds, How Different Are Their Portfolios?

Although all 3 schemes belong to the same mutual fund category, their September portfolios reveal considerably different investment approaches.

Source. ACE MF-based portfolio analysis for September 2026. Other classifications include investments not placed in the 3 domestic market-cap categories and should not be interpreted entirely as cash holdings.

The differences are substantial.

HDFC has the highest allocation to large-cap stocks and substantial exposure to major banks. Parag Parikh has relatively limited exposure to Indian mid- and small-cap companies but combines its domestic investments with international equities and other permitted assets.

ICICI Prudential, meanwhile, maintains much greater exposure to small-cap companies and automobile-related businesses.

Another important difference is portfolio concentration.

Parag Parikh had just over half its assets in its 10 largest holdings under the reported comparison, compared with approximately 44% for each of the other 2 funds.

When a fund has a concentrated portfolio, the performance of a limited number of companies can have a greater effect on its overall returns.

This can work favourably if those companies perform strongly, but it can also create additional risk if several major holdings underperform at the same time.

Why Did Their September Returns Differ?

The September returns show how differently the schemes performed during the same market environment.

Parag Parikh declined 2.19%, HDFC declined 5.89%, and ICICI Prudential declined 6.24%.

Their different allocations to companies, sectors, international equities and other investments can influence these outcomes. However, the exact contribution of each holding would require a detailed performance attribution.

A smaller decline during 1 month does not necessarily establish that a fund is permanently safer or better managed.

For example, ICICI Prudential recorded the steepest September decline among the 3 schemes, but the ACE MF comparison showed that it had the strongest 6-month return at 16.43%.

This illustrates why comparing mutual funds using only 1 month's returns can give an incomplete picture.

Are Investors Actually Diversifying by Holding All 3 Flexi Cap Funds?

One of the biggest misconceptions about mutual funds is that investing in several schemes automatically creates diversification.

In reality, 2 or more funds can invest in many of the same companies.

For example, HDFC Flexi Cap, Parag Parikh Flexi Cap and ICICI Prudential Flexi Cap all held substantial positions in HDFC Bank and ICICI Bank as of September 2026.

Source. September 2026 portfolio disclosures.

Suppose an investor invests ₹90,000 equally across these 3 mutual funds, allocating ₹30,000 to each.

Based on the September portfolio weights, approximately 6.98% of the combined investment would be exposed to ICICI Bank, while another 5.63% would be invested in HDFC Bank.

This means approximately 12.61% of the total investment, or around ₹11,350, would depend on just 2 banking companies.

The investor may believe that money is spread across 3 independent funds, but a meaningful part of the underlying exposure remains concentrated in the same businesses.

This overlap is not automatically a problem. However, it demonstrates why investors should examine common holdings rather than relying only on the number of schemes in their portfolios.

Why Are Flexi Cap Funds So Different Despite Belonging to the Same Category?

The answer lies in how flexi-cap mutual funds are structured.

According to SEBI's mutual fund categorisation framework, a flexi-cap fund must invest at least 65% of its total assets in equity and equity-related instruments.

However, the fund manager is not required to maintain fixed minimum allocations in large-cap, mid-cap and small-cap stocks individually.

This is different from multi-cap funds, which must maintain at least 25% each in large, mid and small-cap companies.

For example, if small-cap valuations rise sharply, a flexi-cap manager can reduce exposure to that segment without having to maintain a compulsory 25% allocation.

A multi-cap manager has less flexibility because of the category's mandatory allocation requirements.

Investors can explore this difference in detail through Flexi Cap vs Multi Cap Funds.

But flexibility also creates an important responsibility for the investor.

Because the fund manager has considerable freedom, the scheme's actual portfolio can change significantly over time. A fund that focuses on large companies today may increase investments in smaller businesses later.

The category name remains the same, but the risk exposure may change.

Does Higher Inflow Mean a Mutual Fund Is Better?

Not necessarily.

Higher inflows indicate that more money is entering a scheme than leaving it over the relevant period. This could reflect investor interest, recurring SIPs, distribution reach, past performance or several other factors. However, inflows do not establish whether a fund's underlying stocks are attractively valued.

Similarly, an increase in AUM does not guarantee better future returns. A large fund must deploy substantial amounts of money, potentially making it harder to build meaningful positions in smaller and less liquid companies.

For instance, a fund managing over ₹1 lakh crore may require a much larger investment to create even a 1% portfolio allocation than a fund managing ₹10,000 crore.

This can make portfolio size relevant when evaluating how freely a manager can invest in smaller companies. Investors should therefore view inflows and AUM as useful information about a scheme, not as standalone reasons to choose one.

What Should Investors Check Before Investing in Flexi Cap Funds?

September's portfolio changes show why investors need to evaluate what a fund actually owns rather than relying only on its category or recent performance.

Several factors deserve attention.

1. Market-cap allocation. Check the proportion invested in large, mid and small companies. This helps determine whether the fund carries the level of exposure to smaller businesses that you expect.
2. Sector concentration. Understand whether a significant part of the portfolio depends on banking, automobiles, technology or another industry.
3. Stock-level concentration. Examine how much money is invested in the largest 5 or 10 holdings. A concentrated fund can behave differently from one that spreads its investments across more companies.
4. Portfolio overlap. If you already own equity mutual funds, compare their underlying holdings before adding another scheme.
5. Long-term performance and risk. Evaluate performance across multiple market conditions instead of making decisions based on the latest month's returns.
6. Fund costs and investment horizon. Consider expense ratios, exit loads, the riskometer and whether the scheme fits your financial goals.

An investor should also remember that portfolio disclosures are snapshots of holdings on a particular date. They do not guarantee that the fund manager will continue owning the same securities or maintaining the same allocations.

What Should Investors Learn From the September Flexi Cap Fund Portfolios?

September 2026 highlighted an interesting contrast in the mutual fund industry. Investors continued allocating money to flexi-cap schemes, even as the 3 funds receiving the highest estimated inflows delivered negative monthly returns.

However, the portfolios reveal that these investors were not necessarily gaining exposure to similar investment strategies.

HDFC continued increasing positions in major banks, Parag Parikh significantly expanded its DLF investment while maintaining international diversification, and ICICI Prudential increased automobile holdings alongside relatively high small-cap exposure.

None of these approaches is automatically superior. Their suitability depends on how the underlying companies perform, the risks the portfolio carries and the investor's financial objectives.

The biggest lesson is that the flexibility of a flexi-cap fund belongs to the fund manager, but understanding how that flexibility is being used remains the investor's responsibility.

Before choosing a flexi-cap fund based on inflows, performance or popularity, investors should understand what it owns, how concentrated those investments are and whether the portfolio genuinely adds diversification to their existing investments.