List of Best Flexi Cap Funds in India 2024 for You to Invest!
If you’re looking for a mutual fund that allows you to invest across different market capitalisations, flexi cap funds can be a good option. These open-ended and dynamic equity funds have gained popularity as an investment option due to their flexibility and diversification. With no restrictions on the size or type of company, you can use this versatile approach to invest freely.
Thus, in this blog, we’ll learn more about the top flexi funds, including their features, benefits, factors, and more. Let’s begin.
What are Flexi Cap Mutual Funds?
A flexi cap fund is a type of mutual fund that invests in stocks across different market capitalisations depending on the prevailing market conditions. These are also known as diversified equity funds or multi-cap funds. According to SEBI’s notification, flexi cap funds invest 65% of the scheme’s total assets in equity and equity-related instruments.
Unlike mid-cap and small-cap funds that focus on specific market capitalisations, flexi cap funds offer the freedom to invest in any company, regardless of its market size. This flexibility allows them to diversify their portfolio and potentially generate consistent returns.
Features of a Flexi Cap Fund
Some significant features of the best flexi cap funds are as follows:
- Diversification: Flexi cap funds maintain a diversified equity portfolio across market capitalisations and sectors. This flexible mandate allows the fund manager to dynamically allocate investments to capitalise on opportunities and mitigate risks, with the aim of maximising returns for investors.
- Flexibility: Flexi cap funds can invest in funds across large-cap, mid-cap, and small-cap segments without any restrictions on allocating each market cap. This active management approach aims to generate returns compared to a static allocation.
- Professional Management: These funds are managed by professional experts called fund managers. By investing in flexi cap funds, fund managers are able to diversify the investment portfolio without being restricted to a single segment.
- Investment in different sectors: The best flexi cap mutual funds invest in companies across different sectors, allowing investors to gain exposure to a broad range of industries. These funds can switch from one segment to another if one capital market isn’t performing well.
Best Flexi Cap Funds to Invest in India 2024 (Based on 5Y CAGR)
| Name | AUM (in cr) | Expense Ratio (%) | CAGR 5Y (%) |
|---|---|---|---|
| Quant Flexi Cap Fund | 5,562.88 | 0.59 | 35 |
| JM Flexicap Fund | 2,472.06 | 0.44 | 27 |
| Parag Parikh Flexi Cap Fund | 66,383.82 | 0.62 | 25.52 |
| Franklin India Flexi Cap Fund | 15,468.08 | 0.96 | 22.26 |
| Kotak Multi Asset Allocator FoF-Dynamic | 1,453.74 | 0.3 | 22 |
| PGIM India Flexi Cap Fund | 6,094.88 | 0.43 | 22 |
| Edelweiss Flexi Cap Fund | 1,784.40 | 0.46 | 21.75 |
| HDFC Flexi Cap Fund | 54,692.15 | 0.79 | 22 |
| Union Flexi Cap Fund | 2,051.30 | 0.86 | 20.84 |
| HSBC Flexi Cap Fund | 4,435.43 | 1.16 | 21 |
Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.
Note: The list of top flexi cap funds is from 21st June 2024 and the data is derived from Tickertape Mutual Fund Screener.
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Overview of the Top Flexi Cap Funds in India
Quant Flexi Cap Fund
Quant Flexi Cap Fund is an equity mutual fund scheme launched by Quant Mutual Fund. The fund was launched on 15th October 2018. As of 21st June 2024, the AUM of the fund is Rs. 5,562.88 cr., and its expense ratio is 0.59%. The fund has been able to generate better returns compared to other funds in the same category. Based on our flexi cap fund list, Quant Flexi Cap Fund has demonstrated a strong performance with a CAGR of 34.67% over the past five years.
JM Flexicap Funds
The fund is an open-ended equity fund that aims to provide capital appreciation by investing in equity and equity-related investments. JM Financial Mutual Fund launched this fund on 1st January 2013. As of 21st June 2024, the AUM of the fund is Rs. 2,472.06 cr. with an expense ratio of 0.44%. The fund has generated better price returns than bank FDs. and has recorded a 5Y CAGR of 27.49%. The minimum SIP investment is Rs. 250.
Parag Parikh Flexi Cap Fund
Parag Parikh Flexi Cap Fund is a diversified equity scheme launched by PPFAS Mutual Fund. The fund has been active since 28th May 2013. The investment objective of this scheme is to generate long-term capital appreciation through an actively managed portfolio that is primarily invested in equity and equity-linked securities. As of 21st June 2024, the AUM of the fund is Rs. 66,383.82 cr. It has an expense ratio of 0.62%. Over the five years, the fund has delivered a CAGR of 22.26%. One can start the SIP investment in this fund at just Rs. 3,000.
Franklin India Flexi Cap Fund
Launched on 29th September 1994, Franklin India Flexi Cap Fund is an open-ended equity scheme was introduced by Franklin Templeton Mutual Fund. The fund has the flexibility to invest across small, mid-cap and large-cap companies. As of 21st June 2024, the AUM of the fund is Rs. 15,468.08 cr. with an equity ratio of 0.96%. Furthermore, the fund has a 5Y CAGR of 22.26%. The minimum SIP amount is Rs. 500.
Kotak Multi Asset Allocator FoF-Dynamic
Kotak Multi Asset Allocator FOF Dynamic is an open-ended fund of funds that invests primarily in units of Kotak Mutual Fund schemes & ETFs/index funds. It does not directly invest in stocks, bonds or other securities but allocates its assets across a diversified portfolio of Kotak’s underlying schemes and index-tracking funds. The fund was launched on 9th August 2004 by Kotak Mahindra Mutual Fund. As of 21st June 2024, the AUM of the fund is Rs. 1,453.74 cr. with an expense ratio of 0.3%. It has delivered a 5Y CAGR of 22.15%. The minimum SIP amount is Rs. 100.
PGIM India Flexi Cap Fund
PGIM India Flexi Cap Fund is an open-ended dynamic equity scheme launched by PGIM India Mutual Fund on 4th March 2015. The fund aims to allocate its portfolio across companies belonging to different market capitalisations. As of 21st June 2024, the AUM of the fund is Rs. 6,094.88 cr. It follows a disciplined investment approach. The fund has an expense ratio of 0.43% and a 5Y CAGR of 22.13%. You can do an SIP starting at just Rs. 1,000.
Edelweiss Flexi Cap Fund
Edelweiss Flexi Cap Fund is a flexi cap fund launched by Edelweiss Mutual Fund. The fund has been operational since 3rd February 2015. As of 21st June 2024, the AUM of the fund is Rs. 1,784.40 cr. and has delivered a CAGR of 21.75% in the last five years. It has an expense ratio of 0.46%. Furthermore, the minimum SIP amount for the fund is Rs. 100.
HDFC Flexi Cap Fund
HDFC Flexi Cap Fund is an equity mutual fund scheme launched by HDFC Mutual Fund on 1st January 1995. As of 21st June 2024, this open-ended fund has an AUM of Rs. 54,692.16 cr. The fund has an expense ratio of 0.79%. The fund has been able to generate better returns compared to other funds in the same category. It has delivered a 5Y CAGR of 21.56%. Furthermore, the minimum SIP amount is Rs. 100.
Union Flexi Cap Fund
The Union Flexi Cap Fund is another equity mutual fund scheme launched by Union Mutual Fund. The scheme was launched on 10th June 2011. The AUM of the fund is Rs. 2,051.30 cr. as of 21st June 2024. The fund has delivered a CAGR of 20.84% over the last five years and has an expense ratio of 0.86%. The minimum SIP amount to invest in this scheme is Rs. 500.
HSBC Flexi Cap Fund
HSBC Flexi Cap Fund is an open-ended dynamic equity fund. The fund was launched on 24th February 2004 by HSBC Mutual Fund. The fund predominantly invests in equity and equity-related investments. As of 21st June 2024, the AUM of the fund is Rs. 4,435.43 cr. and has delivered 5Y CAGR of 20.70%. The fund has an expense ratio of 1.16%.
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Types of Flexi Cap Funds
While flexi cap funds, by nature, are highly flexible, they can be categorised based on the way they are offered to investors. The two primary categories of flexi cap funds are:
- Direct Flexi Cap Funds: These funds are available directly through the Asset Management Company (AMC) or its website. Investors can invest in direct flexi cap funds without involving intermediaries like brokers or distributors. This often leads to lower expense ratios, potentially resulting in better returns over time.
- Regular Flexi Cap Funds: Regular Flexi Cap funds are sold through intermediaries such as mutual fund distributors or financial advisors. While these intermediaries provide services and guidance to investors, they typically earn commissions from the fund house, which can result in slightly higher expense ratios for regular funds.
Investors can choose between direct and regular flexi cap funds based on their preferences and whether they prefer a self-directed approach or seek professional management. Both types of funds offer the same underlying investment strategy, and the choice between them primarily revolves around the cost structure and the level of investor involvement.
How to Invest in a Flexi Cap Fund?
You can easily invest in flexi cap mutual funds by following these steps:
- To invest in mutual funds, you can visit the equity investment platform such as Zerodha or Tickertape.
- The next step would be to research and identify the best flexi cap funds to invest in which aligns with your investment thesis. You can easily select and learn more about the best flexi cap funds with the help of a financial tool like the Tickertape Mutual Fund Screener. With 50+ pre-loaded filters, it helps you to create a comprehensive list by giving insights about the fund’s performance. Try it now!
- Once you have selected the funds based on different metrics and parameters, log into your account and go to the ‘Mutual Funds’ section. Decide whether you want to invest through a Systematic Investment Plan (SIP) or with a one-time lump-sum payment. If you opt for an SIP, set your monthly investment date, enter the desired amount, and choose your preferred payment method.
It’s important to thoroughly research and evaluate the best flexi cap funds before investing, considering factors like performance, risk, and costs. This can help you make an informed decision that aligns with your financial goals and risk tolerance. Additionally, it is advisable to consult and/or a financial advisor before investing.
Benefits of Investing in a Flexi Cap Fund
Here are some of the key benefits of flexi cap funds:
- Exposure to Different Market Capitalisation: Flexi cap funds allow you to gain exposure to different market capitalisations and invest seamlessly. These funds have the flexibility to invest across large-cap, mid-cap, and small-cap stocks, allowing you to diversify your portfolio and potentially benefit from the growth potential of companies across the market capitalisation spectrum.
- Lower Risk: The diversification offered by flexi cap funds helps reduce the risk of investment losses compared to single-segment funds such as small-cap or mid-cap funds. Additionally, the fund manager has the flexibility to shift the portfolio allocation depending on market conditions, which helps reduce overall investment risk.
- Active Fund Management: Flexi Cap Funds are actively managed by a professional fund manager who uses his expertise to select the best flexi cap mutual funds to invest in 2024 and adjust the portfolio as per the market conditions. The fund manager regularly monitors the market trends and adjusts the fund’s asset allocation to ensure it remains aligned with its investment objectives. This active fund management helps to generate better returns and mitigate risks.
What is the Difference Between Flexi Cap Funds and Multi Cap Funds?
The following table demonstrates a comparative analysis of Flexi Cap Funds vs Multi Cap Funds:
| Aspects of Difference | Flexi Cap Funds | Multi Cap Funds |
| Investment Mandate | Highly flexible, with no constraints on capitalisation allocation. | Mandated to maintain 25% allocation across all capitalisation segments. |
| Asset Allocation Freedom | Greater freedom to choose stocks regardless of company size or market segment. | Limited flexibility due to the 25% allocation mandate, making them somewhat constrained. |
| Switching Between Segments | Can freely switch between market segments based on opportunities and trends. | Restricted in switching, as they must adhere to the 25% allocation rule, allowing only marginal adjustments. |
| Differentiation Factor | Launched as a distinct category to provide more flexibility than multi-cap funds. | Traditional approach with a balanced allocation strategy. |
| Restrictions | Minimal restrictions on stock selection and allocation. | Constrained by the 25% allocation mandate, limiting manoeuvrability. |
| Overall Flexibility | Offers a high level of investment flexibility suited for dynamic market conditions. | Constraints on capitalisation allocation. |
Flexi Cap Funds stand out for their agility and adaptability in capital allocation, making them a preferred choice for investors seeking greater freedom and versatility in their investment strategy.
Who Should Invest in Flexi Cap Funds?
Here’s a breakdown of who can consider investing in flexi cap funds:
- Aggressive Investors: If you have a higher risk tolerance and are looking for capital appreciation over the long term, flexi cap funds provide the opportunity to invest in a diversified mix of companies across market capitalisations.
- Diversification Seekers: Investors who want diversification without being restricted by specific market segments can benefit from flexi cap funds. These funds allow you to tap into growth potential across large-cap, mid-cap, and small-cap stocks.
- Dynamic Market Enthusiasts: For those who want their investments to adapt to changing market conditions, flexi cap funds are an ideal choice. Fund managers have the flexibility to adjust the portfolio as per market trends.
- Long-term Investors: Flexi Cap Funds are well-suited for individuals with a long investment horizon. They provide the freedom to capitalise on market opportunities and trends over time.
- Experienced Investors: Seasoned investors who can actively monitor and manage their investments may find flexi cap funds appealing. The flexibility requires active decision-making based on market dynamics.
Limitations of Flexi Cap Funds
Flexi cap funds offer versatility and growth potential, but like any investment option, they come with their own set of limitations. Here are the key constraints to consider:
- Manager’s Discretion: While fund managers have the flexibility to invest across various market segments, they may also have significant discretion in asset allocation. Thus, depending on their outlook, they can switch between segments, which may result in varying risk levels and returns.
- Differing Risk Profiles: Due to the broad investment spectrum, not all flexi cap funds have the same risk profile. Some may adopt a more conservative approach, while others could be more aggressive. The flexi cap fund managers actively balance risk and return by leveraging investment opportunities across various market capitalisations. Anil Rego, founder of Right Horizons PMS, suggests that, in current market conditions, the flexi-cap strategy stands out for equity investors. It enables them to shift funds between large, mid, and small caps based on market dynamics. In times of volatility, investors tend to seek safety, making large-cap stocks a logical choice for investment.
- Market Volatility: Given the volatility in the equity markets, these open-ended equity schemes may have higher exposure to the volatility of small caps or the sluggishness of large caps, which can impact the overall portfolio performance during turbulent market conditions. Thus, investors should carefully evaluate their investment choices within this category.
Taxation on Flexi Cap Funds
Flexi cap funds primarily invest in equity or equity-related instruments, subjecting their gains to equity mutual fund tax treatment. Based on the holding period, the capital gains tax is classified into two categories:
| Capital Gain Tax | Duration | Tax Rate |
| Short-Term Capital Gain(STCG) | Within 12 months ofinvestment | 20% |
| Long-Term Capital Gain (STCG) | Over 12 months of investment | 12.5% |
Factors to Consider Before Investing in Flexi Cap Funds
Before investing in a flexi cap mutual fund, there are certain factors that one should consider:
- Fund Manager: Choosing a fund with an experienced and proven fund manager is crucial, as they are responsible for managing the fund through various market conditions and capitalising on opportunities across market capitalisations. Therefore, while selecting a flexi cap fund, it’s important to research the fund manager’s track record and experience in managing flexi cap funds or similar diversified equity funds.
- Investment Objective: Before making an investment decision, it is important to understand the investment objective of the flexi cap mutual fund. This ensures the fund’s strategy and risk profile match what you are trying to achieve, whether it’s capital appreciation, regular income, or a combination.
- Expense Ratio: The expense ratio is the annual fee charged by the mutual fund for managing investments and has a direct impact on the net returns you receive. Therefore, a lower expense ratio is generally preferred as it allows for a greater portion of the fund’s returns to be retained by investors. Therefore, it is important to compare the expense ratios of different flexi cap funds and choose the one that offers a lower expense ratio without compromising on the quality.
- Market Capitalisation Bias: Flexi cap funds can have varying degrees of exposure to large, mid, and small-cap stocks. Thus, it is important to understand the fund’s market capitalisation bias and ensure it aligns with your investment objectives and risk profile.
To Wrap It Up…
To conclude, flexi cap funds are equity funds that invest more than 65% of their assets towards equity. Known for their flexibility in terms of asset allocation, these funds offer a unique advantage by allowing fund managers to invest across various market capitalisations. By dynamically adjusting their exposure, they can potentially navigate volatile market environments more effectively and deliver risk-adjusted returns over the long term. However, it is advisable to conduct thorough research and/or consult a financial advisor before investing.
Frequently Asked Questions on Flexi Cap Funds
Flexi cap mutual funds are open-ended equity schemes that can invest in large-cap, mid-cap, and small-cap companies without being restricted by market capitalisation limits. This helps the fund manager maintain a diversified portfolio and mitigate risk.
Based on the 5Y CAGR, here are the top 5 flexi cap funds that you can consider:
(a) Quant Flexi Cap Fund
(b) JM Flexicap Fund
(c) Parag Parikh Flexi Cap Fund
(d) Franklin India Flexi Cap Fund
(e) Kotak Multi Asset Allocator FoF-Dynamic
Note: This information is intended for educational purposes and should not be construed as a recommendation or advice.
The main difference between large-cap and flexi cap funds is their investment scope. Large-cap funds concentrate exclusively on blue-chip companies with large market capitalisations, whereas flexi cap funds have the flexibility to invest across various market capitalisations, diversifying their portfolio with a mix of large-cap, mid-cap, and small-cap stocks.
Flexi cap funds are dynamic equity funds that largely invest in equity and equity-related schemes. These funds take a versatile approach to investing across various market capitalisations, investing in large-cap, mid-cap, and small-cap companies.
The key difference between multi-cap and flexi cap funds is the investment strategy. As the name suggests, flexi cap funds offer the flexibility to invest across different market capitalisations. Since its an equity fund, it invests more than 65% of its assets towards its investments. On the other hand, multi-cap funds must invest at least 25% of their assets in large-cap, mid-cap, and small-cap companies.
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