What are Flexi Cap Funds?
Table of Contents
In the ever-changing world of stock markets, flexibility has an important role. That’s where Flexi Caps Funds get the attention of the investors. It is a unique category of mutual funds that allows the investors to invest in large-cap and small-cap stocks without any fixed allocation. If you are a new investor or looking to diversify your portfolio you have to understand what is flexi cap funds in mutual funds, its features, benefits, who are the investors, tax implications, needs and historic returns.
What is a Flexi Cap Fund?
In mutual funds the selection of large-cap, mid-cap and small-cap is very difficult, mostly when the market is volatile. So, just imagine that if a mutual fund allows investors to invest in any companies like large, medium or small depending on growth size. Sounds great, right? Here is Flexi Cap mutual fund stand different.
Meaning of Flexi Cap Funds, an equity fund that offers flexibility to the investors to adjust their portfolio according to the market performance. SEBI (Securities and Exchange Board of India) announced that these funds have a 65% investment in equities. And it offers access to large-cap, mid-cap, and small-cap funds through a single investment.
Features of Flexi Cap Funds
Flexi Cap Funds are introduced by SEBI circular dated 6 November 2020. Some of the important features of Flexi Cap Funds listed below;
🔸 Flexi Cap Funds invest in a mix of large, mid, and small-cap stocks. This diversification helps manage risk while seeking higher returns.
🔸 Fund managers have the freedom to change asset allocations as market opportunities shift, unlike large or mid-cap funds which have fixed mandates.
🔸 These funds rely heavily on the fund manager’s experience and market view, making them actively managed in nature.
🔸 As per SEBI guidelines, Flexi Cap Funds must invest at least 65% of the total assets in equities, ensuring they remain equity oriented.
🔸 Allowed to invest up to 35% of portfolio in various fixed return investments like bonds.
Benefits of Flexi Cap Funds
| Adaptability of Market Cycle | Helps funds to adjust positions based on the segments (large, mid or small cap) performance. |
| Balanced Risk-Rewards Ratio | Large-caps offering stability while mid and small-caps offering growth. So, the blend allows to balance between risk and reward. |
| Fund Managing Professionally | The professional fund managers will manage allocation, use market opportunities and minimize potential downsides. |
| Suitable for Long-Term Wealth Creation | The combination of stability and growth can be act as an effective tool for long term capital appreciation. |
| Equity-Oriented Investments | It has the power to beat inflation in the long term. |
Who Should Invest in Flexi Cap Funds?
Flexi Cap Funds are a great investment option for investors who dream about their equity exposure across several markets. Here you can see who could consider investing in these funds:
Long-term Investors
These investors are looking to gain long-term goals, like children’s education, marriage, retirement, etc., and it has a time horizon of 5 years.
Moderate Risk Traders
These traders have a long-term vision and are ready to handle market volatility.
Seeking Diversification
Investors who are looking to diversify their portfolio for growth, by using this fund they can access a diversified portfolio through a single Flexi Cap Fund.
Tax Implications on Flexi Cap Funds
It is very important to understand the tax implications of Flexi Cap Funds. Here’s a brief breakdown about it;
🠖 Short-Term Capital Gains (STGC)
If the units are sold within a year, the tax of 15% is applicable on gains.
🠖 Long-Term Capital Gains (LTCG)
If the units hold more than one year and gains above ₹1 lakh in a FY, that are taxed at 10% without indexation.
🠖 Dividends
Dividends from Flexi Cap Funds are taxable because it is considered as the investor’s income and is taxed as per their income tax slab.
Historic Returns on Flexi Cap Funds
NAV & Returns data as on 13-May-25 (Source: Moneycontrol)
| Scheme Name | Crisil Rating | AuM (Cr) | 1W | 6M | 1Y | 5Y | 10Y |
| ICICI Prudential Flexicap Fund – Direct Plan – Growth | 3 | 16,677.22 | 2% | 1% | 10% | – | – |
| Kotak Flexi Cap Fund – Direct Plan – Growth | 3 | 50,811.65 | 2% | 5% | 12% | 24% | 15% |
| WhiteOak Capital Flexi Cap Fund – Direct Plan – Growth | – | 4,683.59 | 2% | 3% | 16% | – | – |
| Mahindra Manulife Flexi Cap Fund – Direct Plan – Growth | 4 | 1,460.42 | 2% | 4% | 12% | – | – |
| Canara Robeco Flexi Cap Fund – Direct Plan – Growth | 3 | 12,608.62 | 2% | 2% | 13% | 23% | 14% |
| Motilal Oswal Flexi Cap Fund – Direct Plan – Growth | 5 | 12,418.46 | 4% | 3% | 21% | 25% | 15% |
| Parag Parikh Flexi Cap Fund – Direct Plan – Growth | 5 | 98,514.28 | 2% | 5% | 16% | 29% | 18% |
| Invesco India Flexi Cap Fund – Direct Plan – Growth | 4 | 2,753.00 | 2% | 2% | 17% | – | – |
| Bandhan Flexi Cap Fund – Direct Plan – Growth | 3 | 7,178.75 | 2% | 4% | 11% | 23% | 12% |
| UTI Flexi Cap Fund – Direct Plan – Growth | 2 | 25,190.40 | 2% | 2% | 16% | 21% | 13% |
| HSBC Flexi Cap Fund – Direct Plan – Growth | 4 | 4,700.30 | 3% | 0% | 13% | 26% | 14% |
| ITI Flexi Cap Fund – Direct Plan – Growth | – | 1,052.47 | 3% | -2% | 10% | – | – |
| DSP Flexi Cap Fund – Direct Plan – Growth | 3 | 11,411.63 | 2% | 1% | 15% | 25% | 15% |
| Edelweiss Flexi Cap Fund – Direct Plan – Growth | 4 | 2,542.30 | 2% | 0% | 14% | 27% | 16% |
| 360 ONE Flexicap Fund – Direct Plan – Growth | – | 1,540.16 | 3% | -1% | 13% | – | – |
| Navi Flexi Cap Fund – Direct Plan – Growth | 2 | 243.97 | 3% | -2% | 8% | 23% | – |
| Franklin India Flexi Cap Fund – Direct – Growth | 4 | 18,224.57 | 1% | 3% | 13% | 29% | 15% |
| Union Flexi Cap Fund – Direct Plan – Growth | 3 | 2,227.47 | 2% | 3% | 10% | 25% | 13% |
| NJ Flexi Cap Fund – Direct Plan – Growth | – | 2,144.28 | 2% | -5% | 3% | – | – |
| Aditya Birla Sun Life Flexi Cap Fund – Direct Plan – Growth | 3 | 22,414.04 | 1% | 4% | 15% | 25% | 15% |
| HDFC Flexi Cap Fund – Direct Plan – Growth | 5 | 74,105.46 | 1% | 5% | 19% | 32% | 16% |
| Bank of India Flexi Cap Fund – Direct Plan – Growth | 3 | 1,981.91 | 4% | -4% | 5% | – | – |
| SBI Flexi Cap Fund – Direct Plan – Growth | 2 | 21,660.94 | 2% | 2% | 10% | 23% | 14% |
| Baroda BNP Paribas Flexi Cap Fund – Direct Plan – Growth | – | 1,226.74 | 3% | 0% | 10% | – | – |
| Samco Flexi Cap Fund – Direct Plan – Growth | 1 | 443.07 | 5% | -12% | -12% | – | – |
| Bajaj Finserv Flexi Cap Fund – Direct Plan – Growth | – | 4,494.32 | 2% | 1% | 14% | – | – |
| LIC MF Flexi Cap Fund – Direct Plan – Growth | 1 | 927.32 | 3% | -6% | 3% | 18% | 9% |
| Nippon India Flexi Cap Fund – Direct Plan – Growth | 3 | 8,612.31 | 2% | 1% | 9% | – | – |
| Sundaram Flexi Cap Fund – Direct Plan – Growth | – | 2,012.36 | 1% | 3% | 13% | – | – |
| Tata Flexi Cap Fund – Direct Plan – Growth | 3 | 3,125.49 | 1% | 5% | 15% | 22% | – |
| Mirae Asset Flexi Cap Fund – Direct Plan – Growth | – | 2,658.30 | 2% | 3% | 12% | – | – |
| Axis Flexi Cap Fund – Direct Plan – Growth | 3 | 12,352.57 | 2% | 3% | 13% | 20% | – |
| Taurus Flexi Cap Fund – Direct Plan – Growth | 2 | 346.52 | 2% | -2% | 5% | 20% | 10% |
| PGIM India Flexi Cap Fund – Direct Plan – Growth | 2 | 6,143.28 | 1% | 4% | 13% | 26% | 15% |
| Helios Flexi Cap Fund – Direct Plan – Growth | – | 2,970.94 | 2% | 1% | 11% | – | – |
| TRUSTMF Flexi Cap Fund – Direct Plan – Growth | – | 1,029.80 | 3% | -2% | 12% | – | – |
| JM Flexi Cap Fund – Direct – Growth | 4 | 5,625.21 | 2% | -4% | 7% | 30% | 17% |
| Quant Flexi Cap Fund – Direct Plan – Growth | 2 | 7,016.38 | 2% | 0% | 1% | 36% | 20% |
| Shriram Flexi Cap Fund – Direct Plan – Growth | 1 | 134.04 | 0% | -7% | -4% | 19% | – |
Why Should I Invest in Flexi Cap Funds?
There are many reasons for investors to investing in Flexi Cap Funds, they are listed below;
Flexibility Across Market Caps
The fund allows for allocation where growth opportunities exist, improving return potential.
One-Stop Diversified Equity Exposure
It is a great option for the people who prefer not to manage multiple mutual funds.
Market-Responsive Strategy
Flexi Cap Funds can outperform rigid allocation funds in dynamic or volatile markets.
Backed By Expert Management
Investors benefit from professional insights and research, even without market knowledge.
Conclusion
Flexi Cap Funds means an equity mutual fund that allows the investors to invest across different market caps like large, mid and small cap stocks. These funds offer the best opportunity to manage risk through diversification. If you are a seasoned investor or beginner with a long-term goal, you can choose Flexi Cap Funds for the journey.
Create an account in Navia today and explore the power of Flexi Cap Funds for smarter, diversified investing!
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Frequently Asked Questions
What are Flexi Cap Mutual Funds?
Flexi Cap Mutual Funds are equity funds that invest across large-cap, mid-cap, and small-cap stocks, offering flexibility and diversification based on market conditions.
Is the Flexi Cap Fund Good?
Yes, Flexi Cap Funds are considered good for investors who are seeking diversified equity exposure.
What is the Difference Between Flexi Cap and Multicap?
In Flexi Cap Funds you can invest freely across large, mid and small-cap stocks without any restrictions. But in Multicap Funds we must invest a minimum of 25% in each large, mid and small-cap stocks.
What are the Disadvantages of Flexi Caps?
Flexi Cap Funds carry market risk due to equity exposure and may face short-term volatility. Their flexible strategy also depends heavily on the fund manager’s decisions, which can impact performance.
Which is Better, MidCap or Flexicap?
Flexi Cap Funds offer diversified exposure across market caps by managing risks while MidCap Funds focus on mid-sized companies and may offer higher returns with higher risk. The better choice depends on your risk tolerance and investment goals.
Which Mutual Fund is Best?
The best mutual fund depends on your financial goals, risk tolerance, and investment horizon.
Is Parag Parikh Flexi Cap Fund Good?
Yes, the Parag Parikh Flexi Cap Fund is considered a strong investment option, particularly for long-term investors seeking diversified equity exposure.
DISCLAIMER: Investments in the securities market are subject to market risks, read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Brokerage will not exceed the SEBI prescribed limit.
