What is Flexi Cap Fund?

Best Flexi Cap Funds

Review

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 100Nifty mid-capNifty small-cap
20183.38-12.48-26.54
202126.0246.4761.48

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 NameLaunchNet Assets (Cr)No of Stocks in the PortfolioTop 10 Stocks %1 Yr Ret (%)3 Yr Ret (%)5 Yr Ret (%)10 Yr Ret (%)15 Yr Ret (%)Standard DeviationSharpe RatioFund Manager
Quant Flexi Cap Fund15-Oct-08421974.5557.0832.1823.1818.2--22.51.16Sandeep Tandon, Ankit A Pande
Parag Parikh Flexi Cap Fund28-May-1319,9332652.838.2128.6622.31----17.671.39Rajeev Thakkar, Raj Mehta
PGIM India Flexi Cap Fund04-Mar-153,3024938.2137.3429.1720.94----22.421.09Anandha Padmanabhan Anjeneyan , Aniruddha Naha , Puneet Pal
SBI Focused Equity Fund11-Oct-0423,7172645.6136.4523.3320.0119.2214.6120.540.98R. Srinivasan
Union Flexi Cap Fund10-Jun-119165543.2632.0622.5717.3314.31--20.70.93Vinay Paharia, Hardick Bora
IIFL Focused Equity Fund30-Oct-142,6303051.2730.0928.520.31----22.051.12Mayur Patel
Sundaram Focused Fund11-Nov-056962850.5329.6221.5317.8216.1913.0719.350.91Ravi Gopalakrishnan, Rahul Baijal
Canara Robeco Flexi Cap Fund16-Sep-036,598604228.6421.9919.5116.1714.2218.940.96Shridatta Bhandwaldar
DSP Flexi Cap Fund29-Apr-977,6565848.1127.1122.9417.5916.3514.0121.590.98Atul Bhole Abhishek Ghosh
UTI Flexi Cap Fund18-May-9225,5416240.5426.9524.7220.3417.814.6921.081.02Ajay 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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