Exploring mutual fund options? Discover top 5 flexi-cap funds in last 10 years

Flexi-cap funds to watch: The recent market volatility has led many investors to reconsider their investment strategies, with some turning to flexi-cap mutual funds. These funds, falling under the equity-focused category, offer flexibility in terms of market capitalisation exposure, say experts. 

While they are required to allocate at least 65 per cent of their assets to equity and equity-related instruments, there are no restrictions on the upper or lower limits of exposure to different market caps. This flexibility allows fund managers to adapt their portfolios based on market conditions, liquidity, and valuation, potentially leading to superior performance over time.

Why consider investing in flexi-cap funds?

Notably, flexi-cap funds are not immune to market risks, and their performance can vary. However, for investors seeking diversification across a wide range of stocks and who can tolerate some level of return fluctuation, flexi-cap funds have their appeal. They offer several potential benefits, including:

Diversification: These funds spread investments across various market capitalisations, reducing risk exposure.
Flexibility: Fund managers can adjust portfolio allocations to enhance the potential for risk-adjusted returns.
Long-term growth opportunities: By investing in companies of all sizes, including those with high growth potential, flexi-cap funds can position themselves for outperformance over the long term.

"Flexi-cap mutual funds are a suitable choice for investors who have a long-term horizon, are comfortable with some return volatility, and seek diversified equity investment opportunities. With a wide range of options available, investors can choose from different flexi-cap funds based on their financial understanding, market outlook, and risk tolerance," said Aastha Gupta, CEO, Share India FinCap.

A closer look at high-performing 10-year flexi-cap funds with AMFI data

1. Quant Flexi Cap Fund: 10-year returns of 23.72 per cent, Expense Ratio of 0.77 per cent, Portfolio Turnover Ratio of 327 per cent.
2. Aditya Birla Sun Life Flexi Cap Fund: 10-year returns of 17.56 per cent, Expense Ratio of 0.91 per cent, Portfolio Turnover Ratio of 16 per cent.
3. HDFC Flexi Cap Fund: 10-year returns of 17.52 per cent, Expense Ratio of 0.94 per cent, Portfolio Turnover Ratio of 28.04 per cent.
4. DSP Flexi Cap Fund: 10-year returns of 17.12 per cent, Expense Ratio of 0.78 per cent, Portfolio Turnover Ratio of 34 per cent.
5. Canara Robeco Flexi Cap Fund: 10-year returns of 15.30 per cent, Expense Ratio of 0.53 per cent, Portfolio Turnover Ratio of 23 per cent.

Some investors choose to invest in a single fund, while others opt for multiple funds to benefit from different management styles.

"There's no hard and fast rule regarding the number of flexi-cap funds to include in your portfolio; it depends on your risk tolerance and investment capacity, whether through lump-sum investments or systematic investment plans," Gupta added.