What is Flexi Cap in Mututal Fund ? And What are the different types of Flexi cap mutual funds in India?

What is Flexi Cap in Mututal Fund ?

Flexi Cap is a type of mutual fund scheme where the fund manager has the flexibility to invest across market capitalization segments such as large-cap, mid-cap, and small-cap companies, without any predetermined allocation limit. This means that the fund manager has the freedom to invest in stocks across market capitalization based on the investment objective and market conditions.

Flexi Cap funds are ideal for investors who are looking for a diversified portfolio across market capitalization segments and want the fund manager to have the flexibility to make investment decisions based on market conditions. These funds are suitable for investors with a moderate to high-risk appetite and a long-term investment horizon.

The Securities and Exchange Board of India (SEBI) has recently introduced a new category of mutual fund called "Flexi Cap Fund" in 2021. Under this new category, fund managers are required to invest a minimum of 65% of their assets in equity and equity-related instruments, with the flexibility to invest across market capitalization segments.
 

 Different types of Flexi cap mutual funds :

Flexi cap mutual funds are a type of mutual fund in India that invest in stocks across market capitalizations, i.e., large-cap, mid-cap, and small-cap companies, based on the fund manager's assessment of market conditions and investment opportunities. These funds offer flexibility to invest in stocks across the market spectrum, providing investors with a well-diversified portfolio. Here are some different types of Flexi cap mutual funds in India:

    Pure Flexi Cap Fund: A pure flexi-cap fund is a mutual fund that invests in stocks across market capitalizations based on the fund manager's assessment of market conditions and opportunities. The allocation to large-cap, mid-cap, and small-cap stocks may vary based on the fund manager's outlook and investment strategy.

    Equity-oriented hybrid funds: Equity-oriented hybrid funds are mutual funds that invest in a mix of equity and debt instruments. These funds typically invest a minimum of 65% of their assets in equity instruments and the remaining portion in debt securities. Flexi-cap mutual funds can also be classified as equity-oriented hybrid funds if they invest a certain percentage of their assets in debt securities.

    Value Flexi Cap Funds: Value flexi-cap funds are mutual funds that follow a value-based investment strategy, i.e., investing in stocks that are undervalued by the market but have strong fundamentals. These funds aim to generate higher returns by investing in stocks that are trading at a discount to their intrinsic value.

    Growth Flexi Cap Funds: Growth flexi-cap funds are mutual funds that follow a growth-based investment strategy, i.e., investing in stocks of companies that are expected to grow at a faster rate than the market average. These funds aim to generate higher returns by investing in stocks of companies that have strong growth potential.

    Thematic Flexi Cap Funds: Thematic flexi-cap funds are mutual funds that invest in stocks of companies that are related to a specific theme or trend, such as technology, healthcare, or infrastructure. These funds aim to generate higher returns by investing in stocks of companies that are expected to benefit from the theme or trend.

Investors should carefully consider their investment objectives, risk appetite, and investment horizon before investing in any mutual fund. It's always advisable to consult with a financial advisor before making any investment decisions.