Flexicap funds: Why investors, managers like this wealth-creation strategy

Five funds in the category have given steady returns in three years: Here is more about them

Flexicap funds are a popular investment for their dynamic strategy that allows fund managers to allocate assets across large, mid and smallcap stocks based on market condition. The flexibility helps balance risk and reward, making flexicaps an attractive option for long-term wealth creation.

 

What is a flexicap fund?

 

Flexicap mutual funds allow fund managers to allocate investments across large, mid and smallcaps depending on market conditions. Most flexicap funds have a largecap bias, providing stability while also capturing growth from mid and smallcap segments. This category has performed well in the recent past due to active management and strategic allocation.

 

Top 5 flexi-cap funds with highest returns over the past three years

  JM Flexi-cap Fund-Reg (G) has achieved the highest three-year compound annual growth rate (CAGR) at 23.0 per cent. HDFC Flexi Cap Fund (G) follows closely at a 21.6 per cent CAGR. Motilal Oswal Flexi Cap Fund-Reg (G) has also performed well, delivering 19.2 per cent CAGR. ICICI Pru Flexicap Fund (G) and Parag Parikh Flexi Cap Fund-Reg (G) have provided 18.1 per cent and 17.7 per cent CAGR, respectively, indicating steady returns. Bank of India Flexi Cap Fund-Reg (G) stood fifth with a 17.3 per cent CAGR over three years. While short-term returns fluctuate, as seen in the one-year CAGR figures, these funds have demonstrated resilience and growth potential, making them noteworthy options for long-term investors. 

 

“Among top-performing flexi-cap funds over the last three years, HDFC Flexi Cap Fund stands out as a solid choice. It is one of HDFC’s flagship funds with a strong track record, earnings growth potential and experienced fund management. For investors looking to invest in a flexi-cap fund, this can be a great option to consider,” said Chirag Muni, executive director, Anand Rathi Wealth Limited.

 

“Flexicap funds remain one of the best ways to invest and navigate the equity market volatility due to its inherent flexibility. Investors should continue with their Systematic Investment Plan (SIPs) to benefit from the short term correction which is underway,” said Varun Goel, sr. fund manager - equity, Mirae Asset Investment Managers (India).