Flexi cap mutual funds: Why do investors love them the most? 4 key reasons

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value funds, sectoral, ELSS and flexi cap funds. Among all these variants, the most popular category based on the size of assets is flexi cap mutual funds. There are 38 flexi cap mutual funds with total assets under management (AUM) of ₹3.27 lakh crore.

This is higher than any of the remaining 10 equity fund categories. For instance, there are 42 ELSS equity schemes while the total asset value of these schemes stands at ₹2 lakh crore. Similarly, there are 149 sectoral/ thematic funds but the total value of their assets amounts to ₹2.58 lakh crore, reveals AMFI data as on Dec 31, 2023.

For the unversed, let us first explain what flexi cap mutual funds are: Flexi-cap mutual funds refer to the schemes which have the flexibility of investing in securities across their market capitalisation i.e., small cap, mid cap and large cap stocks. As per the Sebi’s categorisation of mutual fund schemes, flexi cap funds must invest a minimum of 65 percent of assets in equity & equity-related instruments. Flexi cap mutual funds, as a category, delivered 30.26 percent return in the past one year, 12.48 percent in the past two years and 18.13 percent in the past three years, shows the Morning Star data.

(Source: Morning Star; return as on Jan 19, 2024) 1. Flexibility they offer: They are most popular among investors because their asset allocation is quite flexible and therefore, not confined to the norms which restrict categories such as large cap, mid cap and even multi cap funds. “In flexi cap funds, fund managers take their calls to have exposure in all sections of equity, debt allocation, or even prefer to sit on cash.