Top Flexi Cap Funds in India for 2024

Last Updated on Aug 13, 2024 by Anjali Chourasiya

If you are concerned about market volatility and are unsure about which market capitalisation to bet on, flexi-cap funds can be your ally. Flexi-cap funds are relatively new to the equity funds pack. These funds can be invested in companies across market caps without any restrictions. You can invest one time or do the due diligence to choose the best flexi cap fund for SIP, as these funds are known to produce consistent returns.

In this article, we will delve deeper into understanding flexi-cap funds and their benefits, and also, by using Tickertape Mutual Fund Screener, we will explore the best flexi-cap funds in 2024.

List of the Top 10 Flexi Cap Mutual Funds  (2024)

Name	AUM (Rs. in cr.)	Expense Ratio (%)	CAGR 3Y (%)	CAGR 5Y (%)
Quant Flexi Cap Fund	6,272.21	0.59	27.25	35.24
JM Flexicap Fund	3,216.32	0.43	33.25	28.44
Parag Parikh Flexi Cap Fund	66,383.82	0.62	20.09	26.48
Franklin India Flexi Cap Fund	15,468.09	0.95	23.97	23.79
PGIM India Flexi Cap Fund	6,315.38	0.42	14.00	23.48
HDFC Flexi Cap Fund	54,692.16	0.78	27.95	23.34
Edelweiss Flexi Cap Fund	2,139.15	0.35	22.69	23.19
DSP Flexi Cap Fund	11,391.49	0.71	17.87	22.34
Kotak Multi Asset Allocator FoF-Dynamic	1,453.75	0.30	20.86	22.30
Union Flexi Cap Fund	2,207.55	0.84	18.36	22.16

Note: The above information is dated 22nd July 2024. The parameters used to filter the list of top flexi cap mutual funds on Tickertape’s Mutual Fund Screener are:

• Category > Equity > Flexi cap funds
• Plan – Growth
• 5Y CAGR: Set high to low

🚀 Pro Tip: Use Tickertape’s Mutual Fund Screener to filter and compare funds based on performance, expense ratio, and risk. Find funds that match your goals and risk tolerance for smarter investment choices.

Overview of the Best Flexi Cap Mutual Funds

Quant Flexi Cap Fund

The Quant Flexi Cap Fund was launched on 1st January 1997 by Quant Mutual Fund. With an AUM of Rs. 6,272.21 cr., this fund offers flexibility by investing across market capitalisations. It has a low expense ratio of 0.59%, making it cost-effective for investors. Over the past three years, it has achieved a Compound Annual Growth Rate (CAGR) of 27.25%, and over the past five years, the CAGR stands at an impressive 35.24%.

JM Flexicap Fund

Launched on 1st September 2000 by JM Financial Mutual Fund, the JM Flexicap Fund manages an AUM of Rs. 3,216.32 cr. The fund has a competitive expense ratio of 0.43%. It has delivered a strong three-year CAGR of 33.25%, showcasing its potential for high returns. Over five years, the fund’s CAGR is 28.44%.

Parag Parikh Flexi Cap Fund

The Parag Parikh Flexi Cap Fund, launched on 28th May 2013 by PPFAS Mutual Fund, holds an AUM of Rs. 66,383.82 cr. With an expense ratio of 0.62%, it offers a balance between cost and performance. The fund has achieved a three-year CAGR of 20.09% and a five-year CAGR of 26.48%.

Franklin India Flexi Cap Fund

Launched on 29th September 1994 by Franklin Templeton Mutual Fund, the Franklin India Flexi Cap Fund has an AUM of Rs. 15,468.09 cr. The fund’s expense ratio is 0.95%. Over the past three years, it has recorded a CAGR of 23.97%, and over five years, it has a CAGR of 23.79%.

PGIM India Flexi Cap Fund

The PGIM India Flexi Cap Fund was launched on 4th March 2015 by PGIM India Mutual Fund. It manages an AUM of Rs. 6,315.38 cr. With an expense ratio of 0.42%, this fund has delivered a three-year CAGR of 14.00% and a five-year CAGR of 23.48%.

HDFC Flexi Cap Fund

Launched on 1st January 1995 by HDFC Mutual Fund, the HDFC Flexi Cap Fund has an AUM of Rs. 54,692.16 cr. The fund’s expense ratio is 0.78%. It has achieved a three-year CAGR of 27.95% and a five-year CAGR of 23.34%.

Edelweiss Flexi Cap Fund

The Edelweiss Flexi Cap Fund was launched on 20th August 2009 by Edelweiss Mutual Fund. It has an AUM of Rs. 2,139.15 cr. and an expense ratio of 0.35%. The fund has a three-year CAGR of 22.69% and a five-year CAGR of 23.19%.

DSP Flexi Cap Fund

Launched on 29th April 1997 by DSP Mutual Fund, the DSP Flexi Cap Fund manages an AUM of Rs. 11,391.49 cr. The fund’s expense ratio is 0.71%. It has recorded a three-year CAGR of 17.87% and a five-year CAGR of 22.34%.

Kotak Multi Asset Allocator FoF-Dynamic

The Kotak Multi Asset Allocator FoF-Dynamic was launched on 2nd December 2010 by Kotak Mahindra Mutual Fund. With an AUM of Rs. 1,453.75 cr., this fund has an expense ratio of 0.30%. It has achieved a three-year CAGR of 20.86% and a five-year CAGR of 22.30%.

Union Flexi Cap Fund

Launched on 10th June 2011 by Union Mutual Fund, the Union Flexi Cap Fund has an AUM of Rs. 2,207.55 cr. The fund’s expense ratio is 0.84%. It has delivered a three-year CAGR of 18.36% and a five-year CAGR of 22.16%.

What Are Flexi Cap Funds?

Flexi-cap funds were introduced by the Securities and Exchange Board of India (SEBI) on 8th November 2020. These funds are open-ended, dynamic investments that invest at least 65% in equity and equity-related instruments across different market capitalisations.

Fund managers of flexi cap funds can invest in companies of all sizes without limits on particular market segments. For instance, large-cap funds can only invest up to 20% in mid-cap and small-cap companies, whereas flexi-cap funds don’t have such restrictions. That’s one of the striking differences between flexi-cap funds and large-cap funds.

Since there are no limits on the market segment front, fund managers can invest based on a segment’s attractiveness instead of being restricted to a particular market segment, thereby giving better returns.

Flexi-cap mutual funds are ideal for long-term investment wealth creation, and the ideal time horizon for these types of funds is 5-7 yrs. 

Features of Flexi Cap Funds

Diverse Market Capitalisation

Flexi cap funds are not constrained to a specific segment of the market. They have the liberty to invest across large, mid, and small-cap stocks. This wide-ranging market capitalisation exposure allows for a well-balanced portfolio, mitigating risk and capitalising on growth opportunities in different segments of the market.

Dynamic Allocation

One of the hallmark features of Flexi cap funds is their dynamic asset allocation. Fund managers actively adjust the portfolio’s composition in response to market conditions and investment outlooks. This flexibility enables the funds to potentially lower volatility and enhances returns by shifting allocations towards the most favourable opportunities.

Potential For Enhanced Returns

The unconstrained investment approach of Flexi cap funds provides a fertile ground for identifying and capitalising on growth opportunities across the entire market spectrum. This strategic flexibility can lead to higher potential returns for investors, as the funds are not limited to the performance of a single market segment.

Effective Risk Management

The diversified nature of Flexi cap funds serves as a risk mitigation tool. By investing across various sectors and market caps, the funds aim to reduce the impact of market fluctuations and sector-specific risks, potentially offering a more stable investment experience over the long term.

Expert Fund Management

The management of Flexi cap funds is entrusted to experienced fund managers who possess deep market insights and analytical capabilities. Their expertise in evaluating market trends, conducting rigorous research, and making informed allocation decisions is critical for navigating through market cycles and seeking to maximise returns.

Suitability For Long-Term Investment Horizons

Flexi cap funds are particularly well-suited for investors with long-term investment horizons. Their adaptability to market changes allows them to potentially benefit from compounding returns over time, making them an attractive option for building wealth in the long run.

Liquidity

Investors in flexi-cap funds benefit from liquidity, as these funds allow for the buying and selling of units on a regular basis. This liquidity ensures that investors have access to their capital, should they need it, without facing significant barriers or delays.

How to Invest in the Flexi Cap Funds?

Investing in Flexi Cap Funds can be a strategic way to achieve a balanced and diversified investment portfolio. Flexi Cap Funds invest in companies across different market capitalisations, offering both flexibility and growth potential. Here’s a detailed guide on how you can invest in Flexi Cap Funds.

Research and Selection

Begin by researching various Flexi Cap Funds. You can use the Tickertape Mutual Fund Screener to compare different funds based on performance, expense ratio, and other critical parameters. This tool can help you identify funds that suit your investment goals and risk tolerance.

Analyse Fund Details

Investigate the fund’s historical performance, asset allocation, and the fund manager’s track record. The Tickertape Mutual Fund Screener provides detailed insights into each fund, allowing you to make an informed decision. This step is crucial to understand the potential risks and returns associated with the fund.

Determine Investment Amount

Decide on the amount you want to invest. If you are new to investing, you might consider starting with a smaller amount and increasing it gradually as you gain more confidence and understanding of the market. This approach can help mitigate risks associated with market volatility.

Choose Investment Mode

You can invest through a lump sum or via a Systematic Investment Plan (SIP). SIPs allow you to invest a fixed amount regularly, which can help average out the purchase cost over time. This method can be particularly beneficial in volatile markets.

Complete KYC Process

Ensure that your Know Your Customer (KYC) details are updated. This is a mandatory requirement before you can start investing in mutual funds. The KYC process involves submitting personal identification documents to verify your identity.

Select a Platform

You can invest directly through the Asset Management Company’s (AMC) website or use investment platforms. 

Using Tickertape Mutual Fund Screener

Tickertape is a powerful tool for screening and comparing various mutual funds. Here’s how you can use it to invest in Flexi Cap Funds:

1. Visit Tickertape Website: Go to the Tickertape website and navigate to the Mutual Fund Screener section.
2. Set Filters: Apply filters for Flexi Cap Funds to narrow down your options. You can choose from over 50 filters to create a custom filter tailored to your preferences.
3. Compare Funds: Use the comparison feature to evaluate different funds side by side. This feature allows you to see how each fund stacks up against others in terms of performance, risk, and other key metrics.
4. Detailed Analysis: Click on individual funds to see a detailed analysis, including historical performance, portfolio composition, and fund manager information. This detailed view can help you understand the strengths and weaknesses of each fund.
5. Make Informed Decision: Based on the analysis, select the fund that aligns with your investment goals and risk tolerance. Making an informed decision is crucial to achieving your financial objectives.

Investing in Flexi Cap Funds can be a strategic way to achieve a balanced and diversified investment portfolio. By using tools like the Tickertape Mutual Fund Screener, you can make informed decisions and choose the best funds that align with your financial goals. Always remember to assess your risk tolerance and investment horizon before making any investment decisions.

Factors to Consider Before Investing in Flexi Cap Funds

Here are five essential factors to consider before investing in Flexi Cap Funds:

Investment Objective

First and foremost, assess how well a Flexi cap fund fits within your overall investment strategy. These funds are designed for investors seeking growth through a diversified portfolio that spans across large, mid, and small-cap stocks. Ensure that the fund’s objective aligns with your financial goals, whether it’s wealth accumulation, retirement planning, or saving for a specific milestone.

Risk Tolerance

Despite their diversified nature, Flexi cap funds come with their share of market risks, influenced by their exposure to different market segments, including the potentially volatile small-cap sector. Evaluate your risk tolerance to determine if you are comfortable with the level of market fluctuation that can occur in a Flexi Cap Fund. Understanding your capacity to absorb these risks without compromising your financial well-being is crucial.

Fund Performance History

While past performance is not indicative of future results, reviewing a fund’s track record can provide insights into how it has managed during various market conditions. Look at the long-term performance, particularly through different market cycles, to gauge the fund manager’s ability to navigate through volatility and capitalise on opportunities.

Fund Management Expertise

The success of Flexi Cap Funds largely depends on the acumen of the fund manager in allocating assets across different market caps and sectors. Research the fund manager’s experience, investment philosophy, and track record. A skilled manager with a robust strategy and a proven history of adapting to market changes can significantly influence the fund’s performance.

Expense Ratio and Fees

Be mindful of the costs associated with investing in Flexi Cap Funds, including the expense ratio and any additional fees. These costs can eat into your investment returns over time. Compare the fees with those of other funds and consider whether the potential for higher returns justifies the expenses. Lower fees do not necessarily mean better, but it’s important to ensure you are getting value for the fees paid.

4 Benefits of Investing in Flexi Cap Funds

Investing in flexi cap funds may offer several advantages. Here are four potential benefits you can consider:

Portfolio Diversification

The portfolio of flexi cap funds typically consists of investments across different industries. This diversification may help you mitigate market volatility and potentially enjoy consistent returns over the long term. By spreading investments across various sectors, you might reduce the risk associated with a single industry’s performance.

Managed by Seasoned Fund Managers

Flexi cap funds are managed by experienced fund managers who constantly analyse the market. These fund managers can minimise exposure to risky segments during market corrections, potentially safeguarding your investment. This may protect your portfolio from unexpected declines in specific assets or industries caused by short-term or mid-term volatility.

Investment Across Market Capitalisations

Unlike large-cap funds, which are restricted from investing more than 20% in mid-cap and small-cap companies, flexi cap funds have the flexibility to invest in companies across all market capitalisations. This flexibility allows fund managers to allocate investments based on the performance of specific market segments, which may enhance your potential returns.

Exposure to Foreign Markets

Flexi cap funds, with a requirement to invest at least 65% in equity, can also include investments in foreign markets. This global diversification may offer additional opportunities and reduce the risk associated with relying solely on domestic markets. By including international assets, your investment portfolio might benefit from growth in global markets.

Now that you understand the benefits of investing in flexi cap funds, you might feel inclined to explore this investment option further. However, it is important to consider all aspects before making an investment decision. 

What Are the Risks of Investing in Flexi-Cap Funds?

While investing in flexi-cap funds can offer several potential benefits, it is equally important to be aware of the associated risks. Here are some of the risks you might encounter when investing in flexi-cap funds:

Market Risk

Flexi-cap funds are subject to market risk because they invest in equity and equity-related instruments. Market risk refers to the possibility of an investor experiencing losses due to factors that affect the overall performance of financial markets. This can include economic downturns, geopolitical events, or changes in market sentiment. As a result, the value of your investment may fluctuate with market conditions.

Volatility Risk

Flexi-cap funds invest across large-cap, mid-cap, and small-cap companies. While this provides diversification, it also exposes the investment to volatility risk, especially in mid-cap and small-cap segments. These segments can be more volatile compared to large-cap stocks, leading to higher fluctuations in the fund’s net asset value (NAV). This can impact the returns you may receive from your investment.

Management Risk

The performance of flexi-cap funds largely depends on the decisions made by the fund managers. Management risk arises from the possibility that the fund managers may make poor investment decisions, fail to properly assess market conditions, or be unable to adapt to changing market trends. This can adversely affect the fund’s performance and, consequently, your returns.

Concentration Risk

Although flexi-cap funds have the flexibility to invest across various sectors and market capitalisations, there is still a risk of concentration. If the fund manager allocates a significant portion of the portfolio to a particular sector or a few stocks, it may increase the risk if those sectors or stocks underperform. This concentration risk can lead to significant losses in adverse market conditions.

Foreign Investment Risk

Flexi-cap funds can invest in foreign markets, which introduces foreign investment risk. This risk includes currency risk, geopolitical risk, and differences in market regulations. Currency risk arises from fluctuations in the exchange rates, which can impact the returns on foreign investments. Geopolitical risk involves instability or changes in the political environment of the foreign markets, while regulatory risk pertains to the different rules and standards governing those markets.

Liquidity Risk

Flexi-cap funds may face liquidity risk, particularly when investing in mid-cap and small-cap stocks. Liquidity risk refers to the possibility that the fund may not be able to sell its holdings at a fair price due to a lack of buyers in the market. This can be more pronounced in times of market stress, leading to potential losses or delays in redeeming your investment.

How Are Flexi-Cap Funds Taxed?

When you invest in flexi-cap funds, it is crucial to understand how they are taxed. Flexi-cap funds are treated like other equity mutual funds under Indian tax laws.

The Union Budget 2024 has introduced significant changes to the taxation of equity mutual funds, simplifying the tax structure while altering rates and benefits. Here is a detailed breakdown of the new tax rules:

Short-Term Capital Gains (STCG)

If you hold equity mutual funds for less than a year, the gains from these investments are classified as short-term capital gains. According to the new budget, these gains are now taxed at a rate of 20%, which has been increased from the previous rate of 15%.

Long-Term Capital Gains (LTCG)

For equity mutual funds held for more than a year, the gains are considered long-term capital gains. The key points to note under the new budget are:

• Tax-Free Limit: Gains up to Rs. 1.25 lakh in a financial year remain tax-free. This limit has been increased from the previous threshold of Rs. 1 lakh.
• Tax Rate: Any gains above Rs. 1.25 lakh are taxed at a flat rate of 12.5%. It was previously taxed at 10%.
• Indexation: It’s important to note that the benefit of indexation, which previously allowed investors to adjust the purchase price of their assets for inflation, has been removed for all asset classes, including equity mutual funds.

Indexation is a method used to adjust the purchase price of an asset (like property or gold) for inflation over the years. This adjusted price is then used to calculate capital gains. Previously, long-term capital gains from selling property, gold, or other unlisted assets were taxed at 20%, but you could use indexation to reduce your taxable profit. The new rule simplifies the tax structure by setting a flat 12.5% tax rate for all long-term capital gains. However, it removes the indexation benefit.

Summary

Capital Gains Tax	Holding Period	Old Rate	New Rate
Short-Term Capital Gains (STCG)	Less than 12 months	15%	20%
Long-Term Capital Gains (LTCG)	More than 12 months	10%	12.50%

Applicability of Equity Funds Tax Rules

It’s important to note that these tax rules apply to flexi-cap funds because they are categorised as equity funds. According to the regulations, a mutual fund scheme must invest at least 65% of its assets in equity or equity-related instruments to be classified as an equity fund. Flexi-cap funds meet this requirement by investing in a mix of large-cap, mid-cap, and small-cap stocks, providing the flexibility to adjust the portfolio according to market conditions.

Who Should Consider Investing in Flexi Cap Funds?

Moderate Risk Tolerance

If you have a moderate risk appetite, flexi cap funds may be suitable for you. These funds aim to balance risk and reward by investing across various market caps.

Long-Term Investment Horizon

Investors looking for long-term growth might find flexi cap funds appealing. The ability to invest in high-growth mid and small-cap stocks, along with the stability of large-cap stocks, can be beneficial over the long term.

Seeking Diversification

If you want to diversify your portfolio, flexi cap funds might be a good choice. These funds invest in a variety of sectors and market caps, which may help spread risk.

Active Management Preference

If you prefer actively managed funds where the fund manager makes dynamic investment decisions, flexi cap funds can be a good fit. The fund manager’s expertise in shifting allocations based on market conditions can potentially enhance returns.

To Wrap Up

Flexi-cap funds can be an excellent option for investors who seek consistent returns without any restrictions on market capitalisation. And if you’re considering investing in flexi cap funds, selecting the best plan for your SIP investment is crucial. Therefore, we highly recommend that you do your due diligence before choosing the best flexi cap fund for SIP.

Choose the scheme that aligns with your risk tolerance and investment goals. Then, whether you want to go for a one-time investment or take the SIP route, either way, you can ensure that your investment portfolio is well-diversified and optimised for long-term wealth creation.

FAQs about the best flexi cap mutual funds