What if your mutual fund house took the pain of shuffling your investments between large-cap, mid-cap and small-cap funds instead of you having to invest in different mutual funds to benefit from them? Investing in flexicap funds surely gives you the benefit of seeing your funds getting parked in stocks depending on market movement. This also means that irrespective of which way the market sways, your fund continues to perform.
Take, for example, the PGIM India Flexi Cap Fund which has given extraordinarily good returns to its investors in the past. This fund has 96.51 per cent investment in domestic equities of which 42.63 per cent is in large-cap stocks, 17.68 per cent in mid-cap stocks and 15.8 per cent in small-cap stocks. Besides, this fund has 0.14 per cent investment in debt, of which 0.14 per cent is parked in Government securities (G-secs).
The scheme earns around 14.23 per cent returns in a year while the absolute returns over five years are 107.09 per cent. In the past five years, the fund has returned nearly 15% on a CAGR basis. Since its inception, investors have earned 162.80 per cent absolute returns.
Fund performance
Many investors inquire why they must invest in this fund more than any other. A comparative analysis of most income funds in this category underscores the exceptionally high returns that investors have earned by investing in it.
| Scheme Name | 3-year Returns | 5-year Returns |
| Canara Robeco Flexi Cap Fund - Direct Plan-Growth | 16.39 per cent | 14.26 per cent |
| Edelweiss Flexi Cap Fund-Direct Plan | 14.36 per cent | 13.04 per cent |
| Union Flexi Cap Fund - Direct Plan-Growth | 16.92 per cent | 12.71 per cent |
| HDFC Flexi Cap Fund - Direct Plan-Growth | 13.83 per cent | 12.36 per cent |
| SBI Flexi Cap Fund - Direct Plan-Growth | 13.47 per cent | 11.84 per cent |
Staying invested for a prolonged period yields returns exceeding most other equity mutual funds. This you can achieve by investing in this fund through systematic investment plans over a period ranging from 10 to 15 years.
PGIM India Flexi Cap Fund
Launched on Mar 04, 2015, the current assets under management (AUM) amount to ₹4179.77 crore. The risk factor is high considering how this fund spreads itself thin among multiple investment options. This medium-sized debt fund charges a 0.44 per cent expense ratio.
The fund is benchmarked against the NIFTY 500 Total Return Index and can be bought to earn long-term returns. Considering the low expense ratio charged by this fund, the returns from this long-duration fund are quite high compared to most other funds in this category.
The minimum amount you can invest in this fund is ₹5000 in a lump sum while you can make an added minimum investment of ₹1000 in a lump sum in this fund. The minimum investment you can make through SIPs is ₹1000.
This fund attracts an exit load of 0.50 per cent for exits within 90 days from the date of allotment of units. However, for exits beyond 90 days from the date of allotment of units, the exit load is “Nil”.
As per the guidelines stipulated by the Securities and Exchange Board of India (SEBI), investments in this fund come under the “Very High Risk” category. Keeping in mind, how the asset management company has been keen to serve its clients as per the global best practices, this fund has been awarded the “Five Stars” CRISIL Mutual Fund Ranking.
Tax treatment
If the fund’s units are redeemed within three years of investment, the profits will be added to the investor’s income, which will be then taxed as per the rates mentioned in the Income Tax slab.
For investors who redeem the fund units after three years of staying invested, gains will be taxed at 20 per cent post indexation benefits.
Investors also earn dividends regularly from this fund. The dividend income from this fund will be added to the income of the investor who would then be taxed as per the respective tax slabs.
The fund house will deduct a TDS of 10 per cent on dividend income exceeding ₹5000 in any financial year.
Disclaimer: Mutual funds are subject to market risks. Please read the offer document carefully before investing. Also, the Securities and Exchange Board of India has stipulated the latest guidelines categorising this fund under the “Moderate Risk” category.
