Flexi Cap Fund

Investments

A flexi-cap fund can invest across large, mid, and small-cap stocks without any fixed allocation constraint. The fund manager freely shifts between market caps based on valuations and opportunities. One of the most versatile equity fund categories.

In detail

SEBI mandated minimum 65% in equity but no restrictions on market cap distribution. Popular flexi-caps: Parag Parikh Flexi Cap (also invests 35% internationally), HDFC Flexi Cap, Kotak Flexi Cap.nnAdvantage over multi-cap: manager discretion to go heavily large-cap in expensive markets and add mid/small-cap in undervalued conditions. A single flexi-cap fund can serve as core equity holding.

Real-life example

🇮🇳 India example

During 2021 bull market (expensive mid-caps), Parag Parikh Flexi Cap held 55% large-cap + 35% international + 10% mid. Post-2022 correction (mid-caps cheaper), shifted to 40% large + 35% international + 25% mid-small. This dynamic shift enhanced risk-adjusted returns.

Frequently asked questions

Flexi-cap vs multi-cap fund -- which is better? ▼

Flexi-cap: fund manager decides allocation based on market conditions. Multi-cap: SEBI mandates minimum 25% each in large, mid, small-cap. Flexi-cap gives manager more flexibility; multi-cap guarantees mid and small-cap exposure.