Flexi-cap funds are open-ended equity mutual fund schemes that invest across stocks, sectors, and market capitalisations including large-cap, mid-cap, and small-cap stocks. These funds are required to allocate at least 65 per cent of their corpus to equities. Unlike funds that are bound to a specific market capitalisation, flexi cap funds have the freedom to dynamically adjust their portfolio in response to evolving market conditions and investment opportunities. This flexibility enables fund managers to shift allocations as needed, allowing investors to tap into the momentum of different segments of the market and potentially earn superior returns compared to funds with fixed structures.
There is often confusion between flexi cap and multi cap funds, as both are categorized by market capitalisation. However, the key difference lies in allocation mandates. Multi cap funds are required to invest a minimum of 25 per cent each in large-cap, mid-cap, and small-cap stocks, as per regulatory guidelines, which limits the fund manager’s ability to adjust based on market outlook.
Flexi cap funds are better suited for investors with a moderate to high risk tolerance who are seeking long-term capital growth. To assist investors in selecting consistently strong performers, the bl.portfolio Star Track Mutual Fund Ratings evaluates funds based on their long-term returns and risk characteristics. Funds are assigned star ratings from 1 to 5, with 5 stars representing the most consistent and high-performing options. Among these, several flexi-cap funds have earned four- and five-star ratings under this system. Here is the list: