What is Flexi Cap Mutual Fund:
Explained

Are you an investor looking to diversify your investment portfolio across market
capitalization?
Then investing in Flexi-Cap Mutual Fund will be helpful for investors who are
looking to invest across market capitalization to get higher returns.

So now let’s see how Flexi Cap Mutual Fund works and how to gain maximum
benefit from investing in this category.

Table of Contents

• What is a Flexi-Cap Mutual Fund?
  
• What are the features of Flexi-Cap Mutual Fund?
  
• How Flexi cap funds can be placed in your fund basket?
  
• Which Mutual Fund offers more flexibility between Flexi Cap or Multi Cap?
  
• What is the tax liability of Flexi Cap Mutual Fund?

What is a Flexi-Cap Mutual Fund?

In general Mutual Funds invest in Stocks focusing on a particular market cap,
based on the fund category. Large Cap Mutual Funds investing in Blue Chip Stocks
is an example.

But Flexi-Cap Mutual Fund is a dynamic equity scheme that enables you to invest
across market capitalization.

In a Flexi-Cap Mutual Fund, a minimum of 65% of the assets will be invested in
equity and equity-related instruments.

In this Mutual Fund, the Fund Manager can invest freely under any market cap
without any restrictions.

Here the Fund Manager can choose stocks with good track records & growth
potential.

Flexi Cap Mutual Fund will help you get risk-adjusted returns, here the Blue Chip
Stocks help in stability while the small-sized companies help you maximize the
return.

What are the features of Flexi-Cap Mutual Fund?

Imagine yourself as an investor with a high-risk appetite looking for various
investment options apart from Small-Cap Mutual Funds.
Benefits of Flexi-Cap Fund:

• It enables investors to invest freely across various caps without any
  restrictions.
  
• Here the Fund Manager can pick stocks with Good track records and High
  growth potential
  
• It gives investors an inflation-beating return in the long run.
  
• It helps investors take undue advantage of the market trend.
• It is less risky in comparison to Small-Cap Mutual Funds.
• It has better chances of yielding you good returns than Large & Mid-Cap Mutual Funds.
• This scheme helps you get risk-adjusted returns as the Blue Chip Stocks willhelp you gain stability and small company stocks help you maximize growth.

How Flexi-Cap Mutual Funds can be placed in your fund basket?

Here are a few factors you should consider before looking to invest in Flexi Cap
Mutual Funds.

• As an investor, you should be well aware of the market trend.
• Investing in Flexi-Cap Mutual Fund doesn’t ensure you a stable return.
• It is more volatile than Multi-Cap Mutual Funds.
• Depending on the investor’s awareness of the market the flexibility could
  be a boon or a ban.
• Looking to achieve Long-Term Financial Goals.

The ideal time period for Flexi-Cap Mutual Fund to yield high returns is from 5 to
7 years.

Which Mutual Fund offers more flexibility between Flexi Cap or Multi Cap?

In Multi-Cap Mutual Funds, there should be a minimum of 25% invested in each
Small-Cap, Mid-Cap, and Large-Cap stock.

The fund manager can invest the remaining 25% based on his market outlook.

Whereas in the Flexi-Cap Mutual Fund, the fund manager can invest freely under
any market cap without any restrictions.

Here in this Flexi-Cap Mutual Fund, the Fund Manager has the complete flexibility
to choose the stock with a good track record & growth potential.

What is the tax liability of Flexi Cap Mutual Fund?

As an investor, we should know how our Mutual Fund will be taxed.

If the Mutual Fund holding period is less than one year, it is termed a Short-Term
Capital Gain. It attracts a tax of 15% on the gain.

Suppose the same Mutual Fund holding period is more than one year then it is
called Long–Term Capital Gain.

If your Long-Term Capital Gain is below one lakh, it will be exempted from tax.

If your Long-Term Capital Gain crosses one lakh, then it is taxed 10% on the gain.

To know even further about this Flexi-Cap Mutual Fund, we recommend you
watch the video below.

What is a Flexi cap fund? – Watch here!

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