11 best flexi cap mutual fund schemes with highest returns in past ten years | Mint
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Business News/ Money / Personal Finance/  11 best flexi cap mutual fund schemes with highest returns in past ten years
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11 best flexi cap mutual fund schemes with highest returns in past ten years

An increasing urge to invest in flexi-cap funds considering the increasing frequency of market volatilities and the resulting economic turmoil that has relegated many large-cap companies to the backfoot while propelling the mid-sized and small-sized companies to lead the stock market from the front.

Which flexicap funds should you invest in 2023?Premium
Which flexicap funds should you invest in 2023?

Given the stock market’s erratic behaviour, numerous investors find themselves bewildered regarding their investment decisions. The ongoing discussion about whether to invest in large-cap, mid-cap, or small-cap sectors has intensified, leading many, particularly those new to investing, to gravitate towards flexi-cap funds. These funds enable investors to allocate their investments across all market capitalization categories.

According to SEBI regulations, flexi-cap mutual funds are categorized as equity-focused mutual funds. This designation mandates that a minimum of 65 per cent of their total assets must be invested in equity and equity-related instruments, while the remaining 35 per cent can be allocated to debt or other instruments.

Benefiting from flexicap fund investments

One notable advantage of these funds is the flexibility granted to fund managers, allowing them to dynamically adjust the portfolio’s asset allocation based on their market outlook and investment objectives. For instance, if the fund manager perceives overvaluation in large-cap stocks, they have the flexibility to reduce the allocation to large-cap stocks and increase the allocation to mid-cap or small-cap stocks.

The adaptability inherent in flexi-cap funds enables them to seize growth opportunities across the entire market spectrum, potentially delivering superior risk-adjusted returns compared to funds concentrated on a single market capitalization category. However, it’s worth noting that flexi-cap funds may also encounter increased volatility owing to their exposure to various market capitalizations.

Some flexi-cap funds have indeed performed well in the past five to 10 years, thus, allowing investors to benefit from varying market capitalizations and frequent market low down in stocks belonging to various sectors. The following table illustrates some of the best-performing flexicap funds along with their returns, thus, underlining how not-so-ambitious investors have benefited from putting their money in these funds.

Name of the fund

10-year returns (in %)

Quant Flexi Cap Fund

23.58

Parag Parikh Flexi Cap Fund

19.89

JM Flexi Cap Fund

19.86

Franklin India Flexi Cap Fund

17.89

Aditya Birla Sun Life Flexi Cap Fund

17.85

HDFC Flexi Cap Fund

17.77

SBI Flexi Cap Fund

17.72

Kotak Flexi Cap Fund

17.66

DSP Flexi Cap Fund

17.61

HSBC Flexi Cap Fund

16.09

Canara Robeco Flexi Cap Fund1

15.88

Source: AMFI (As of November 16, 2023)

Investing in the flexicap fund category is driven by the concept of avoiding the necessity to make precise decisions regarding market capitalization. These funds allocate investments across companies of varying sizes, eliminating the need for specific market segment choices. This diversification strategy aims to reduce risks tied to individual market segments, ultimately contributing to increased stability within the overall portfolio.

These funds prove to be ideal for long-term investment objectives, as their goal is to harness the compounding impact of equity returns over an extended period. Their adaptive nature allows for adept navigation through market cycles, resulting in risk-adjusted returns that outperform more inflexible investment strategies.

 

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Published: 17 Nov 2023, 10:24 AM IST
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