Flexi Cap Mutual Funds
A Flexi Cap Mutual Fund is a category of equity mutual fund that provides the flexibility to invest in securities across all market capitalizations - large-cap, mid-cap, and small-cap, offering investors a diversified portfolio.
As per SEBI guidelines, Flexi Cap funds are required to invest a minimum of 65% of their assets in equity and equity-related securities.
Unlike Large Cap, Mid Cap, or Small Cap mutual funds, Flexi Cap funds are not restricted to a specific market capitalization segment. This allows for a more balanced and adaptive investment approach, catering to varying market conditions.
Additionally, fund managers of Flexi Cap funds also have the flexibility to dynamically adjust asset allocation to navigate market volatility efficiently. These funds may also provide exposure to U.S. equity-related securities, enhancing geographical diversification.
Best Flexi Cap Funds to Invest
Sort by
AUM ₹4722 Cr •
Expense 0.45%
AUM ₹2048 Cr •
Expense 0.48%
AUM ₹64929 Cr •
Expense 0.77%
AUM ₹12598 Cr •
Expense 0.88%
AUM ₹16768 Cr •
Expense 0.79%
AUM ₹2446 Cr •
Expense 0.43%
AUM ₹17450 Cr •
Expense 0.92%
AUM ₹7331 Cr •
Expense 0.59%
AUM ₹4943 Cr •
Expense 1.16%
AUM ₹1458 Cr •
Expense 0.42%
AUM ₹8426 Cr •
Expense 0.45%
AUM ₹51276 Cr •
Expense 0.61%
AUM ₹81919 Cr •
Expense 0.63%
AUM ₹11765 Cr •
Expense 0.72%
AUM ₹141 Cr •
Expense 0.7%
AUM ₹1417 Cr •
Expense 1.35%
AUM ₹371 Cr •
Expense 2.57%
AUM ₹22507 Cr •
Expense 0.91%
AUM ₹1090 Cr •
Expense 0.88%
AUM ₹267 Cr •
Expense 0.42%
How Popular are Flexi-Cap Mutual Funds?
Flexi Cap Funds has highest AUM(Asset Under Management) under the Equity Mutual Fund categories. As of October 2024, Flexi Cap Funds collectively hold 4.44 Lakh Crore of AUM, which is 14.29% of overall Equity Mutual Fund category.
Returns Performance vs Benchmark: Flexi Cap Funds has outperformed its benchmark, generating 27.42% 1-Y returns vs 26.55% of benchmark index - BSE 500 Index.
Source: https://amfiindia.com
How to Invest in Flexi-Cap Mutual Funds?
With INDmoney, you can invest in over 30+ Flexi-cap Mutual Funds online for Free with zero maintenance fee. To invest in the best Flexi-Cap Mutual Funds, follow the below steps:
- Open the INDmoney app and log in with your credentials.
- Go to the "Mutual Funds" section within the app.
- Use the filter options to select "Flexi-Cap Funds" to see the available options.
- Choose between a lump sum investment or a Systematic Investment Plan (SIP) for ongoing investments.
- Enter the amount you wish to invest and confirm the transaction.
Factors to Consider Before Investing in Flexi-Cap Funds
When considering investing in a Flexi-Cap Fund, here are some important points to remember:
Market Conditions: Flexi-Cap Funds are actively managed, and their performance can vary significantly depending on market conditions. Assess whether current market trends favour large-cap stability, mid-cap growth, or small-cap potential, as the fund manager will adjust allocations accordingly.
Risk Tolerance: Flexi-Cap Funds can have varying levels of risk, depending on their allocation to different market caps. Ensure your risk tolerance aligns with the fund's strategy, as exposure to mid-cap and small-cap stocks can increase volatility.
Investment Horizon: These mutual funds are generally suited for medium to long-term investors who can withstand short-term volatility. Consider whether your investment horizon aligns with the typical performance cycle of Flexi-Cap Funds, which may take time to realise potential returns.
Taxation of Flexi-Cap Funds
Short-term capital gains (if held for less than 1 year) on Flexi-Cap Funds are taxed at 20%, while long-term capital gains (if held for more than 1 year) are taxed at 12.5% for gains exceeding INR 1.25 lakh.
Frequently Asked Questions
Yes, investing in flexi-cap mutual funds carries the risk of potential loss, as they are subject to market fluctuations. The value of investments can vary based on market volatility and conditions. Additionally, withdrawing funds too early may lead to losses, especially during periods of market downturns.
Whether a flexi-cap fund is suitable for you depends on your individual financial goals and risk tolerance. These funds offer flexibility and diversification across market segments, which can provide growth opportunities, but they also carry inherent risks due to market fluctuations.
Both Flexi-Cap and Multi-Cap Funds invest across large-cap, mid-cap, and small-cap. However, they differ in their approach and investment flexibility. Let's take a look at these differences:
Investment Flexibility:
- Flexi-Cap Funds: These funds have complete freedom to invest in any proportion across large-cap, mid-cap, and small-cap stocks, without any restrictions. The fund manager can dynamically allocate assets based on market conditions, economic outlook, and opportunities, which allows for more active management and the potential for higher returns.
- Multi-Cap Funds: These funds are required to invest a minimum of 25% each in large-cap, mid-cap, and small-cap stocks. This fixed allocation ensures that the portfolio maintains a balanced exposure across all three market segments, but it also limits the fund manager's flexibility to shift investments as per changing market dynamics.
Risk Profile:
- Flexi-Cap Funds: Due to the flexibility in asset allocation, the risk profile of Flexi-Cap Mutual Funds can vary widely depending on the fund manager's strategy. If the manager decides to allocate more to mid-cap or small-cap stocks, the risk and potential returns could be higher.
- Multi-Cap Funds: Multi-Cap Funds limit the fund manager's ability to exploit the market movements. However, may provide consistent returns, as the fund manager has to follow the pre-defined allocation rule.
Suitability for Investors:
- Flexi-Cap Funds: These funds are suitable for investors who are comfortable with a dynamic and actively managed portfolio that can adapt to market conditions. They may appeal to those seeking higher returns and willing to accept higher risk.
- Multi-Cap Funds: Investors looking for a more balanced and diversified investment across all market caps, with relatively lesser risk, may prefer Multi-Cap Funds. These funds are ideal for those who prefer a steady allocation strategy.
Flexi-cap funds can be a suitable option for a Systematic Investment Plan (SIP), as their diversified nature allows for potential growth across different market segments. SIPs help spread investment over time, reducing the impact of short-term market fluctuations.
The main requirement for flexi-cap funds is that they must invest at least 65% of their assets in equities or equity-related instruments. The remaining portion can be allocated to debt instruments, cash, or cash equivalents, providing flexibility in asset allocation.
Flexibility in portfolio allocation, the potential for higher returns, and the ability to capitalise on market opportunities across various market segments are a few benefits of investing in Flexi-Cap Funds.
Due to the dynamic nature of their portfolio, Flexi-Cap Funds can be riskier compared to funds with fixed allocations. The performance heavily depends on the fund manager's ability to make the right investment decisions.
Consider the fund manager's track record, the fund's historical performance, expense ratio, risk tolerance, investment horizon, and how the fund's strategy aligns with your financial goals.
Performance can be evaluated based on historical returns, comparison with benchmark indices, consistency of returns, risk-adjusted returns, and the fund manager's ability to adapt to market changes.
Yes, like other equity mutual funds, gains from flexi-cap mutual funds are subject to capital gains tax. Short-term capital gains (if held for less than 1 year) are taxed at 20%, while long-term capital gains (if held for more than 1 year) are taxed at 12.5% for gains exceeding INR 1.25 lakh.