Flexi Cap Fund
These are mutual funds which invest in equity and equity-related instruments of companies dynamically across all market capitalizations such as small, mid and large-cap.
SEBI Guidelines
Minimum 65% of the scheme’s total assets need to be invested in equity and equity-related instruments. The Asset Management Company (AMC) has the liberty to choose a suitable benchmark for each Flexi-Cap scheme
Important points –
- This category was introduced recently to distinguish itself from multi-cap funds.
- Multicap funds also invest in small, mid and large cap stocks, but with an equal allocation of 25% each.
Flexi-cap fund managers have the liberty to assess and invest in companies regardless of their market capitalization.
Why Flexi Cap Funds?
| Year/Return (in %) | Nifty 100 | Nifty mid-cap | Nifty small-cap |
|---|---|---|---|
| 2018 | 3.38 | -12.48 | -26.54 |
| 2021 | 26.02 | 46.47 | 61.48 |
Source- NSE India
Note – 2018 was a bearish year, and 2021 was a bullish year for markets.
With these funds
- Investors can limit downside risk, as seen in 2018, Nifty 100 (Large caps) performed better than midcap and small caps.
- Investors can increase their upside returns in a bullish market as mid and small caps generally provide better returns than large caps.
Advantages of Investing in Flexi Cap Fund
Diversified Portfolio
You get the best of both worlds – steady growth from large-cap companies and higher growth opportunities of mid and small-cap companies.
Better Risk-adjusted returns
Risk-adjusted return measures the investment’s return after taking into account the degree of risk that was taken to achieve it. These funds leap above the broader index in the aspect, earning higher returns on the same level of risk.
No barrier to market capitalization
As fund managers are free to decide the portfolio allocation, they can allocate funds based on valuations and overall market scenario (bullish or bearish).
Risks of Investing in Flexi Cap Fund
With no blocks in place for investments across multiple caps, the fund manager’s role gains prominence. Research needs to be done on the fund manager and past returns before investing.
In conclusion, Flexi Cap Mutual Fund will be a suitable investment choice. You can expect your diversified portfolio to provide reasonable returns in terms of growth over a long term investment period.
Best Flexi Cap Funds
| Fund Name | Launch | Net Assets (Cr) | No of Stocks in the Portfolio | Top 10 Stocks % | 1 Yr Ret (%) | 3 Yr Ret (%) | 5 Yr Ret (%) | 10 Yr Ret (%) | 15 Yr Ret (%) | Standard Deviation | Sharpe Ratio | Fund Manager |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quant Flexi Cap Fund | 15-Oct-08 | 42 | 19 | 74.55 | 57.08 | 32.18 | 23.18 | 18.2 | -- | 22.5 | 1.16 | Sandeep Tandon, Ankit A Pande |
| Parag Parikh Flexi Cap Fund | 28-May-13 | 19,933 | 26 | 52.8 | 38.21 | 28.66 | 22.31 | -- | -- | 17.67 | 1.39 | Rajeev Thakkar, Raj Mehta |
| PGIM India Flexi Cap Fund | 04-Mar-15 | 3,302 | 49 | 38.21 | 37.34 | 29.17 | 20.94 | -- | -- | 22.42 | 1.09 | Anandha Padmanabhan Anjeneyan , Aniruddha Naha , Puneet Pal |
| SBI Focused Equity Fund | 11-Oct-04 | 23,717 | 26 | 45.61 | 36.45 | 23.33 | 20.01 | 19.22 | 14.61 | 20.54 | 0.98 | R. Srinivasan |
| Union Flexi Cap Fund | 10-Jun-11 | 916 | 55 | 43.26 | 32.06 | 22.57 | 17.33 | 14.31 | -- | 20.7 | 0.93 | Vinay Paharia, Hardick Bora |
| IIFL Focused Equity Fund | 30-Oct-14 | 2,630 | 30 | 51.27 | 30.09 | 28.5 | 20.31 | -- | -- | 22.05 | 1.12 | Mayur Patel |
| Sundaram Focused Fund | 11-Nov-05 | 696 | 28 | 50.53 | 29.62 | 21.53 | 17.82 | 16.19 | 13.07 | 19.35 | 0.91 | Ravi Gopalakrishnan, Rahul Baijal |
| Canara Robeco Flexi Cap Fund | 16-Sep-03 | 6,598 | 60 | 42 | 28.64 | 21.99 | 19.51 | 16.17 | 14.22 | 18.94 | 0.96 | Shridatta Bhandwaldar |
| DSP Flexi Cap Fund | 29-Apr-97 | 7,656 | 58 | 48.11 | 27.11 | 22.94 | 17.59 | 16.35 | 14.01 | 21.59 | 0.98 | Atul Bhole Abhishek Ghosh |
| UTI Flexi Cap Fund | 18-May-92 | 25,541 | 62 | 40.54 | 26.95 | 24.72 | 20.34 | 17.8 | 14.69 | 21.08 | 1.02 | Ajay Tyagi |
*Based on last 1 year returns
Rankings
Among the top 10 Flexi-cap funds we can see that there is an equal distribution of Value research rating of 5 and 4 for the fund houses.
1 Year Returns
*Data as on 21st January 2022
Also, have a look at Best Small Cap Mutual Funds & AMC Profiles, If you need any assistance on How To Invest In Mutual Funds Feel free to contact Wealth Baba – Financial Planner & Investment Advisor in India. We will try to help you out in the best possible way.
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