Flexicap funds set to hit ₹5 trillion AUM, a first for equity schemes

Flexicap funds, the active equity mutual fund (MF) category which offers the highest flexibility to fund managers, is close to becoming the first diversified equity category to achieve assets under management (AUM) of ₹5 trillion.

 

Flexicap schemes account for 15 per cent of the total assets managed by active equity schemes. Two of the largest schemes in the category — run by Parag Parikh Financial Advisory Services MF and HDFC MF— alone manage nearly ₹2 trillion.

 

Flexicap funds provide exposure to stocks in each of the three market segments — largecap, midcap and smallcap. While flexicap funds can invest into largecap, midcap and smallcap stocks in any proportion, the schemes in the category have a largecap bias (50-70 per cent allocation) to align with their benchmarks (NSE 500 and BSE 500). 

 

“Flexicap funds are popular because of the flexibility with fund managers to invest in opportunities across market capitalisation. As a result, it saves investors from the hassle of investing into multiple schemes or shifting allocation from one scheme to another,” said Neil Parikh, chairman and CEO of PPFAS Mutual Fund.

 

Flexicap funds have led the AUM chart for years despite being a late addition to the equity MF category. It was announced in late 2020, but soon became a leading category with most multi-cap funds choosing to categorise as flexicap funds.