Everything You Needed To Know About Investing In Flexi-cap Funds

September 29, 2022 / 11:42 AM IST

With so many mutual funds vying for attention, it can sometimes get overwhelming to figure out what each scheme exactly offers and just how relevant and beneficial they are to you as an investor. Flexi-cap Funds fall under this category with many of us not exactly sure what it means and just how advantageous they can be to potential investors. Which is why we’ve decoded everything you need to know about investing in flexi-cap funds.

What Are Flexi-cap Mutual Funds –

Let’s first understand what flexi-cap funds are. Flexi-cap funds typically invest in well-positioned companies regardless of their market capitalisation, be it large-cap, mid-cap, and small-cap stocks. In other words, flexi-cap funds invest in stocks of all the large-cap, mid-cap, and small-cap companies in a bid to deliver stellar returns to investors.

Flexi-cap funds allow investors to diversify their investment portfolio across companies with different market capitalisation as well as mitigating risk and lowering volatility.

This fund have exposure to large-cap companies that helps to protect your investment from extreme volatility, while they also look at undervalued and growth opportunity stocks in mid-cap and small-cap companies that aim to deliver superior returns.

Top Things To Know About Flexi-caps –

The diverse portfolio mix that flexi-cap comprise, works to balance the risk and reward aspect of the fund to maximum effect. In economically uncertain times such as the ones we’re currently in, flexi-cap fund can offer some of the best returns from mutual funds.

In fact, lately flexi-cap funds have found maximum favour with investors. They have seen inflows of INR 2511.74 crore among equity mutual funds in June 2022, according to data collected from Association of Mutual Funds in India (AMFI). Their total assets under management (AUM) has risen to well over INR 2 lakh crore with investors showing faith in flexi-cap funds over other types of funds such as ELSS, mid-cap, small-cap, sectoral and thematic funds.

The fund manager has the freedom to change the fund allocation whilst switching between taking bear and bull positions, depending on the market condition from time to time. While investors risk their investment trying to ‘time’ the market, flexi-cap funds automatically transfer your investment to the best available opportunity to grow your investment. These funds also ensure that your investment is not stuck in dead or underperforming stocks.

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully

Moneycontrol journalists were not involved in the creation of the article.

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