Just as in an open relationship, there are some mutual funds that offer the best of both the worlds. With flexibility to invest in stocks across market capitalisation, these funds have a good track record of offering good returns, particularly in the medium term.
Here, we try to showcase the returns given by these funds in the past one and three years.
But at the outset, we can explain what exactly are flexi-cap funds.
What are flexi cap funds? They are mutual funds which invest in companies across the market capitalisation spectrum, i.e., mid-cap, large-cap and small-cap stocks.
These funds enable investors to diversify their investment portfolio in the companies of different market capitalisation, thus mitigating risk and lowering volatility. They are also referred to as diversified equity funds or multi-cap funds.
S Sridharan, founder and principal officer of Wealth Ladder Direct said, “Flexi cap funds offer the choice to fund manager to invest in a scrip for which they want to take risk. However, it is vital to note that some fund managers are good in choosing small cap stocks whereas some are good in selecting mid and large cap stocks. So, despite the flexibility, not all funds manage to use this flexibility in an optimum way.”
One-year mutual funds
The past one year returns given by flexi cap funds as on June 30, 2022 were negative barring a few top-performing funds such as those shown in the table below.
Axis Flexi Cap Fund gave -4.85 % return, DSP Flexi Cap fund gave -7.87 % return and HSBC Flexi Cap Fund posted -2.54 % return.
| Flexi cap scheme | Return (%) |
| HDFC Flexi Cap Fund | 8.83 |
| Franklin India Flexi Cap Fund | 2.76 |
| Edelweiss Flexi Cap Fund | 1.06 |
| Parag Parikh Flexi Cap Fund | 3.29 |
(AMFI data as on June 30, 2022)
Three-year mutual funds
As we can see in the table below, past three-year returns of top-performing flexi cap funds was in the range of 14 to 27 percent per annum. IDBI Flexi Cap Fund gave a return of 14.90 percent in past three years, Union Flexi Cap Fund gave 15.20 percent.
| Flexi cap scheme | Return (%) |
| IDBI Flexi Cap Fund | 14.90 |
| Union Flexi Cap Fund | 15.20 |
| JM Flexicap Fund | 15.36 |
| Parag Parikh Flexi Cap Fund | 21.48 |
| PGIM India Flexi Cap Fund | 20.35 |
| Quant Flexi Cap Fund | 27.61 |
(AMFI data as on June 30, 2022)
JM Flexicap Fund gave 15.36 percent, Parag Parikh Flexi Cap Fund gave a return of 21.48 percent, PGIM India Flexi Cap Fund gave a return of 20.35 percent and Quant Flexi Cap Fund gave a return of 27.61 percent.
“Because of the flexibility, there could be fund schemes which have invested 90 percent of their fund money into large cap and only 10 percent in small and mid caps. So, some investors may not be aware of the risk they undertake by investing in flexi cap funds. And therefore, it is not advisable to invest in these fund schemes if investors are not aware of the level of risk they run, or the risk they want to take,” says Sridharan.