If you’re looking for investment options that offer solid returns while allowing for flexibility, flexi-cap mutual funds might be the right choice. Known for their ability to perform across market fluctuations, these funds are designed to balance growth potential with manageable risk, making them popular among investors with long-term financial goals. Learn about the highest returning flexi-cap funds. Top 5 mutual funds for investment.
What Is Flexi-Cap Funds?
Flexi-cap funds are a type of equity mutual fund that doesn’t limit its investments to a single market segment. Instead, fund managers can invest in a mix of large-cap, mid-cap, and small-cap stocks based on market opportunities and economic conditions. This adaptive approach helps flexi-cap funds offer growth potential while managing volatility, allowing them to outperform traditional equity funds in many cases.
The Top 5 Flexi-Cap Funds to Watch
Here’s a look at five high-performing flexi-cap funds that yield returns of up to 24% over a five-year horizon. Each fund has a distinct strategy and allocation approach that may suit different investment goals and risk profiles.
Franklin India Flexi Cap Fund
- 5-Year Return: 23.8%
- Assets Under Management (AUM): ₹14,431 crore
- Strategy: This fund focuses on growth-oriented companies across various market segments. Its blend of large, mid, and small-cap stocks emphasizes companies expected to grow significantly over the long term.
- Why Choose It?: Investors seeking long-term capital appreciation with moderate risk might find this fund suitable due to its balanced approach and focus on growth sectors.
HDFC Flexi Cap Fund
- 5-Year Return: 22.9%
- AUM: ₹26,313 crore
- Strategy: The HDFC Flexi Cap Fund emphasizes stability and long-term growth, leaning toward large-cap stocks while maintaining exposure to smaller companies with growth potential.
- Why Choose It? This fund is ideal for investors who prefer a slightly conservative approach within the flexi-cap category. It offers stable growth while minimizing risks associated with smaller stocks.
ICICI Prudential Flexi Cap Fund
- 5-Year Return: 22.5%
- AUM: ₹15,601 crore
- Strategy: Combining growth and value, this fund invests in high-growth and undervalued companies. Its diversified approach aims to capture gains during market upswings and minimize losses during downturns.
- Why Choose It? This fund is ideal for those who appreciate a mix of growth and value stocks and aim for steady returns over five years or more.
Birla Sun Life Flexi Cap Fund
- 5-Year Return: 21.9%
- AUM: ₹10,439 crore
- Strategy: This fund seeks out quality stocks with strong growth potential, leaning toward sectors expected to perform well in the long run.
- Why Choose It?: Focusing on quality stocks, this fund could attract investors who prefer companies with proven track records and solid financial performance.
SBI Flexi Cap Fund
- 5-Year Return: 21.5%
- AUM: ₹13,411 crore
- Strategy: This fund diversifies its investments across sectors and market caps to reduce risk and capture growth opportunities. It emphasizes large-cap stability while leveraging the growth potential of smaller companies.
- Why Choose It?: Investors looking for diversified exposure to established and emerging companies may find this fund appealing due to its comprehensive market coverage.
Key Benefits of Flexi-Cap Funds
Flexi-cap funds offer several advantages that make them appealing to long-term investors:
- Flexibility Across Market Caps: Flexi-cap funds can adapt to changing market conditions by investing in large, mid, and small-cap stocks.
- Potential for Higher Returns: This category often outperforms traditional equity funds over a long investment horizon.
- Risk Management Through Diversification: Exposure to multiple segments helps reduce the risk associated with any one market cap.
- Ideal for 5+ Year Investment Horizon: Flexi-cap funds are generally best suited for investors with medium- to long-term financial goals.
Things to Consider Before Investing
While flexi-cap funds can offer substantial returns, it’s essential to consider your investment preferences and risk tolerance:
- Risk Tolerance: Flexi-cap funds carry moderate to high risk due to their exposure to mid and small-cap stocks.
- Investment Horizon: Ideally, investors should be prepared to stay invested for at least five years to ride out market fluctuations.
- Expenses and Management Fees: Check the expense ratio; fees can impact net returns.
- Tax Implications: Long-term capital gains tax (LTCG) applies if held beyond one year.
Conclusion
Flexi-cap funds provide a flexible and potentially rewarding investment option for those seeking long-term growth. By diversifying across market segments, these funds can capture gains from various economic cycles, making them resilient against market volatility. Considering adding flexi-cap funds to your portfolio, evaluate the options above based on your financial goals and risk profile. Proper planning allows you to achieve up to 24% returns over five years, aligning your investments with your long-term objectives.
