When it comes to mutual funds, flexi-cap funds have the most flexibility in terms of their investment mandate. They can invest anywhere they want and in any proportion. If we compare this with other equity categories, then large-cap funds must invest at least 80% of their corpus in large-cap stocks. Similarly, Mid-cap and small-cap funds must invest at least 65% in mid-cap and small-cap stocks, respectively.
Now, given this flexibility, investors love flexi cap funds. This is evident from the high AUM of top flexi cap funds. For Example, Parag Parikh Flexi Cap Fund, HDFC Flexi Cap Fund and Kotak Flexi Cap Fund have a combined AUM of more than Rs. 1.3 Lakh Crore. However, are flexi cap funds really the best investment option when it comes to investing in a diversified fund? And is one flexi cap fund enough to take care of all the requirements?
Let’s find out the answer in this article. Below we will explore 3 questions:
- How do flexi cap funds work? In other words, how have they invested across large, mid and small caps.
- How has their performance been?
- What are your options if you want to go beyond flexi-cap funds?
