Large caps currently have a bigger margin of safety than mid or small caps: SBI Mutual Fund's Anup Upadhyay

Subscribe to enjoy similar stories. In the complex world of equity investing, many people find themselves caught between two extremes: the cautious safety of blue-chip giants and the high-octane volatility of small-cap companies. However, some of the most effective wealth creation often happens in the ‘middle ground’, where agility meets stability.

The flexi cap category has emerged as a preferred vehicle for investors seeking a balance between stability and growth. By dynamically shifting between large-, mid-, and small-cap stocks, these funds aim to capture opportunities across the market. To understand the strategy of one of India's largest flexi cap funds, Mint spoke to Anup Upadhyay, fund manager at SBI Mutual Fund, about his outlook for the market, sectoral bets, and structural changes in the SBI Flexi Cap Fund.

Here are some edited excerpts from the interview. The flexi cap category is a staple for all investors. Most investors are neither very aggressive nor very conservative; they want to benefit from wealth creation in equities.

They might not have views on how they want to play the small or mid caps, and they might not have the time for this, so that is what the flexi cap fund solves. Everyone’s core portfolio should have some flexi cap in it. They can add more funds based on their risk appetite.

Currently, about 70% of the portfolio is in large caps, with around 25% in small and mid caps. A year ago, 55% of the portfolio was in large caps. We increased this because the margin of safety is currently better in large caps compared to small and mid caps.