Flexicap funds have been attracting attention for their versatile investment strategy and decent returns. These funds are seen as a strong choice for investors who seek flexibility and long-term growth potential.
Here’s how Flexicap funds stand out and why they might be the right fit for your portfolio, according to Sandeep Bagla, CEO of Trust Mutual Funds.
Flexicap Funds vs. Other Mutual Funds
According to Sandeep Bagla, CEO of Trust Mutual Funds, Flexicap funds stand out because they can invest across all market capitalisations—large-cap, mid-cap, and small-cap stocks—without any restrictions.
Unlike traditional funds that focus on specific segments, Flexicap funds give fund managers the freedom to shift allocations based on market conditions and valuations.
This flexibility allows them to capture growth opportunities across the board.
Role of Flexicap Funds in Portfolio Diversification
Flexicap funds offer high diversification by spreading investments across different market segments.
This helps manage risk effectively while providing exposure to a wide range of sectors and companies.
Balancing Risk and Reward with Flexicap Funds
Bagla said Flexicap funds manage risk and reward dynamically. Unlike traditional funds confined to large, mid, or small-cap stocks, flexicap fund managers can alter their allocations based on market trends.
“This allows them to potentially achieve higher returns in favourable conditions while mitigating risks in volatile markets,” he said.
Market Scenarios Where Flexicap Funds Excel
Flexicap funds perform well in volatile markets.
Their flexibility allows managers to shift between large, mid, and small-cap stocks to capitalise on emerging opportunities.
“This adaptability is especially beneficial during market downturns or periods of economic shifts, as the fund can realign its strategy to optimise returns,” Bagla said.
How Fund Managers Allocate in Flexicap Funds
According to Bagla, fund managers use a mix of market analysis and stock selection to determine allocations.
They assess market conditions, economic indicators, and company valuations to decide the right balance between large-cap, mid-cap, and small-cap stocks.
“For example, the Trust Flexicap Fund follows a unique approach called GARV (Growth at Reasonable Valuations) & TV (Terminal Value) to build a portfolio aimed at long-term growth,” he said.
Recent Performance
Flexicap funds have delivered strong returns in recent years.
According to Bagla, the average return in this category over the past year was 37.88%, outperforming the benchmark return of 36.08%.
Bagla highlights that Flexicap funds hold significant potential for wealth creation over the long term.
Here’s a look at the returns of some of the Flexicap funds:
| Scheme Name | 3-Year Return (%) | 5-Year Return (%) |
| Motilal Oswal Flexi Cap Fund – Direct Plan | 19.43% | 20.55% |
| Tata Flexi Cap Fund – Direct Plan | 16.28% | – |
| DSP Flexi Cap Fund – Direct Plan | 17.46% | 24.24% |
| LIC MF Flexi Cap Fund – Direct Plan | 17.10% | 19.10% |
| UTI Flexi Cap Fund – Direct Plan | 8.68% | 20.42% |
| Samco Flexi Cap Fund – Direct Plan | – | – |
| Canara Robeco Flexi Cap Fund – Direct Plan | 16.07% | 23.61% |
| PGIM India Flexi Cap Fund – Direct Plan | 13.14% | 26.17% |
| Axis Flexi Cap Fund – Direct Plan | 12.76% | 19.93% |
| ICICI Prudential Flexicap Fund – Direct Plan | 23.55% | – |
| HDFC Flexi Cap Fund – Direct Plan | 27.38% | 25.95% |
| Aditya Birla Sun Life Flexi Cap Fund – Direct | 16.89% | 22.62% |
| JM Flexi Cap Fund – Direct – Growth | 30.11% | 29.84% |
| Kotak Flexi Cap Fund – Direct Plan | 17.27% | 21.10% |
| Parag Parikh Flexi Cap Fund – Direct Plan | 19.18% | 27.62% |
| Franklin India Flexi Cap Fund – Direct Plan | 22.75% | 26.12% |
| HSBC Flexi Cap Fund – Direct Plan | 20.73% | 24.86% |
| Nippon India Flexi Cap Fund – Direct Plan | 20.22% | – |
| Union Flexi Cap Fund – Direct Plan | 16.75% | 23.91% |
(Source: Moneycontrol)
Who Should Invest In Flexicap Funds?
According to Bagla, Flexicap funds are ideal for investors looking for diversified equity exposure without the need to make decisions on market cap allocations.
They are especially suited for those investing through SIPs (Systematic Investment Plans) to achieve long-term goals such as retirement, wealth creation, or children’s higher education.
Recommended Investment Horizon for Flexicap Funds
Bagla said to fully benefit from the flexibility and growth potential of Flexicap funds, investors should have a long-term horizon of at least 3-5 years.
This allows the fund to navigate different market cycles and optimise returns over time.
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