Just like in life, flexibility goes a long way in investing too. No wonder then flexi-cap mutual funds — as a category — are the second-most popular among equity funds.
These schemes saw an inflow to the tune of ₹3,513 crore in August 2024, second-highest inflow after sectoral funds, which witnessed an inflow of ₹18,117 crore, reveals the AMFI data.
Flexi cap schemes have, undoubtedly, become quite popular among retail investors. Overall, there are a total of 39 schemes in this category with total AUM of ₹4,29,311.51 crore, second-highest in terms of asset size after sectoral schemes.
Flexi cap mutual funds refer to the schemes which invest a minimum of 65 percent of assets in equity and equity-related instruments. This is the newest category of mutual funds announced via a Sebi circular dated Nov 6, 2020 — according to which — these schemes can invest across large cap, mid cap and small cap stocks.
| Month | Inflow ( ₹crore) |
| Jan | 2,447 |
| Feb | 2,613 |
| Mar | 2,738 |
| April | 2,173 |
| May | 3,155 |
| June | 3,059 |
| July | 3,053 |
| August | 3,513 |
(Source: AMFI)
As one can see in the table above, August saw the highest inflow into flexi cap schemes when compared to the inflows in preceding months.
Financial advisors suggest that flexi cap mutual funds comprise a good category of schemes, offering flexibility to mutual fund houses to invest in the stocks across market capitalisation i.e., small cap, mid cap and large cap in any ratio.
This is unlike multi cap schemes where fund houses are mandated to invest a minimum of 25 percent in each of the three categories.
Because of this inherent flexibility, fund houses can invest across stocks and therefore, have a higher chance of earning higher returns.
| Year | Returns on flexi Cap funds (%) | Returns on multi Cap Funds (%) |
| 1 | 37.20 | 39.79 |
| 2 | 26.13 | 30.38 |
| 3 | 18.25 | 21.53 |
| 5 | 22.04 | 25.70 |
(Source: Morning Star; returns as on Sept 11, 2024)
As we can see in the table above, flexi cap mutual funds — as a category — have delivered double-digit returns in the recent past across tenures.
While the past one-year returns of flexi cap mutual funds stood at 37.20 percent, the past five-year annualised returns were also high at 22.04 percent.
Interestingly, multi cap funds – as a category – also performed significantly well and their returns were quite similar to those of flexi cap mutual funds.
Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.
