Flexi Cap Mutual Funds

Flexicap funds are versatile equity funds with the ability to invest across all market capitalizations—large-cap, mid-cap, and small-cap stocks—offering greater flexibility and diversification. This dynamic approach allows fund managers to capitalize on opportunities in any segment without restrictions.
EXPLORE FUNDS
Flexi Cap Mutual Funds
EXPLORE FUNDS
4 mins read
25-December-2024

Flexi cap mutual funds are a type of equity mutual fund that invests in a diversified portfolio of equity and equity-related securities across market capitalisations. They offer investors the flexibility to invest in companies of all sizes and across sectors. Flexi cap mutual funds are ideal for investors who want to invest in equities but do not want to be restricted by market capitalisation or sectoral allocation. In this article, we will discuss the key features of Flexi Cap mutual funds, types of flexi Cap mutual funds, who should opt to invest in them, taxation of flexi cap mutual funds and more.

What are flexi cap mutual funds?

A flexible cap mutual fund, often referred to as a flexi-cap fund, offers investors a unique advantage by not being constrained to a specific market capitalization benchmark. Unlike traditional funds that are restricted to investing in either large, mid, or small-cap companies, flexi-cap funds provide fund managers with the flexibility to allocate investments across various market capitalization segments. This freedom allows for a more dynamic investment strategy, enabling managers to capitalize on potential opportunities in different market conditions. By diversifying across market caps, flexi-cap funds can potentially mitigate risks associated with fluctuations in any particular market segment, making them an attractive option for investors seeking a balanced and diversified portfolio.

Features of flexi cap mutual funds

Listed below are some features of flexi cap mutual funds:

  • Diversification: Flexi Cap mutual funds provide diversification to investors by investing in a diversified portfolio of equity and equity-related securities across market capitalisations and sectors. This diversification helps mitigate risk and maximise returns. Flexi Cap mutual funds offer investors the flexibility to invest in companies of all sizes, including large-cap, mid-cap, and small-cap companies. By investing in Flexi Cap mutual funds, investors can benefit from professional management, and diversification.
  • Sectoral Allocation: Flexi Cap mutual funds have the flexibility to invest in companies across sectors. This helps reduce sector-specific risks and ensures that the portfolio is not overly reliant on any one sector.
  • Market-Cycle Adaptability: These funds have the flexibility to adjust their holdings based on market conditions. In bullish phases, they may tilt towards mid and small caps, and in bearish markets, they can increase exposure to large caps for stability.
  • Professional Management: Flexi Cap mutual funds are managed by professional fund managers who have expertise in selecting securities that align with the fund’s investment objectives. By investing in Flexi Cap mutual funds, investors can benefit from the expertise of these fund managers.
  • Potential for High Returns and High Risk Tolerance: Their adaptability allows Flexi Cap funds to target stocks with strong growth potential, potentially resulting in higher returns. Also, flexi Cap funds are suitable for investors with high-risk appetite who seek long-term capital appreciation while managing risk exposure.

Read more about: Risks in mutual funds

Frequently asked questions

Which is better, flexi-cap or small-cap?

Flexi-cap funds offer diversification across large, mid, and small-cap companies, potentially for lower risk than pure small-cap funds. However, returns might also be lower.

Is it safe to invest in a flexi-cap fund?

Flexi-cap funds are equity funds, so they carry inherent market risks. But diversification across market caps can help reduce volatility compared to pure small-cap funds.

What is the difference between large-cap and flexi-cap?

Large-cap funds invest in established, big companies. Flexi-cap funds have the flexibility to invest across all company sizes, offering diversification potential.

Disadvantages of flexi-cap funds?

Flexi-cap funds might underperform pure large-cap funds during strong bull markets, and their returns might be less volatile but potentially lower than pure small-cap funds.

Are flexi-cap funds good for beginners?

Flexi-cap funds can be a good option for beginners seeking long-term growth with some built-in diversification. Consider your risk tolerance and investment goals.

Investment horizon for flexi-cap funds?

A long-term horizon (ideally 7+ years) is recommended for flexi-cap funds to ride out market fluctuations and potentially benefit from growth across sectors.

Who should invest in flexi-cap funds?

Flexi-cap funds can suit investors seeking growth potential with some diversification. Consider your risk tolerance and investment goals.

Are flexi-cap funds tax-free?

No, flexi-cap funds are taxed like other equity funds. Capital gains are taxable depending on the holding period.

How to choose a flexi-cap fund?

Research fund performance, expense ratio, investment strategy, and fund manager's track record. Consider your risk profile and investment goals.

Which is better, flexi cap or small-cap?

Flexi cap funds offer a broader investment scope across market capitalisations, including small-cap stocks, while small-cap funds focus solely on small-cap stocks, making the choice dependent on risk tolerance and investment objectives.

Is it safe to invest in a flexi cap fund?

Investing in a flexi cap fund can be relatively safe for investors with a diversified portfolio and a long-term investment horizon, though returns are subject to market fluctuations.

What is the difference between large-cap and flexi cap?

The primary difference lies in investment focus: large-cap funds predominantly invest in large-cap stocks, whereas flexi cap funds have the flexibility to invest across market caps, providing a broader investment universe.

What are the disadvantages of flexi cap funds?

Disadvantages of flexi cap funds include higher volatility due to exposure across market caps, potential underperformance during certain market cycles, and the need for active management.

Is a flexi cap fund good for beginners?

Flexi cap funds can be suitable for beginners with a long-term investment horizon and willingness to tolerate market volatility, though they may require guidance on risk management and portfolio diversification.

How long should I invest in a flexi cap fund?

It is advisable to invest in flexi cap funds for a long-term horizon, ideally five years or more, to potentially ride out market fluctuations and benefit from compounding returns.

Who should invest in a flexi cap fund?

Investors seeking diversification, growth potential across market capitalisations, and flexibility in portfolio management may find Flexi Cap funds suitable for their investment goals.

Is a flexi cap fund tax-free?

Flexi cap funds are subject to taxation on capital gains based on the holding period, with short-term gains taxed at applicable income tax rates and long-term gains taxed at a lower rate with indexation benefit.

How do I choose a flexi cap fund?

When choosing a flexi cap fund, consider factors such as fund performance track record, investment philosophy, fund manager expertise, expense ratio, and alignment with your risk profile and investment objectives.

Show More Show Less

Related Videos

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

Bajaj Finance Limited (“BFL”) is an NBFC offering loans, deposits and third-party wealth management products.

The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. 

This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.

Disclaimer:

Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as 'Mutual Funds) with ARN No. 90319

BFL does NOT:

(i) provide investment advisory services in any manner or form:

(ii) carry customized/personalized suitability assessment:

(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.

In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other/better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.

Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.

Disclaimer on Risk-O-Meter:

Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc, and shall also consult their Professional advisors, if they are unsure about the suitability of the scheme before investing.


Disclosure: Bajaj Finance Limited (BFL) is a distributor of Mutual Funds with ARN - 90319 and distributes mutual funds of Bajaj Finserv Asset Management Limited (BFSAMC). BFL receives commission towards distribution of mutual fund products. BFSAMC is a group company of BFL, carrying business on arm’s length basis without any conflict of interest and in accordance with the prevailing law / regulation.