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?
• What is the minimum investment in 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?
• Flexi Cap Fund vs Index Fund
• Flexi Cap vs. Mid Cap Funds
• Is Flexi Cap Fund Good?
• Which Flex cap fund is Best?

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 will help you gain stability and small company stocks help you maximize growth.

What is the minimum investment in Flexi Cap Mutual Fund?

The minimum investment for Flexi Cap Mutual Funds varies by fund house, but it typically ranges from Rs. 500 to Rs. 5,000. There’s no minimum investment amount mandated by SEBI, so check the specific scheme details before investing.

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?

What is the difference between flexi cap and multicap?

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!

Flexi Cap Fund vs Index Fund

Flexi cap funds offer a dynamic approach to investing, harnessing the potential to generate alpha or returns above the market index. Unlike index funds that simply replicate the market index without much analysis, flexi cap funds adapt to market conditions.

They allow fund managers the flexibility to invest across market caps based on rigorous research and analysis. Isn’t it reassuring to know your investments are being actively managed by experts who scrutinize each stock for its potential?

Investing is an art and a science, requiring intuition, foresight, and expertise. Flexi cap funds embody this philosophy, offering a blend of strategy and adaptability. They are designed to seize opportunities and navigate challenges, striving to outperform the market.

In the ever-evolving financial landscape, isn’t it comforting to have a fund that can adapt and innovate, aiming to create value for investors?

So, while index funds have their merits, flexi cap funds stand out for their proactive approach and potential for alpha generation.

Flexi Cap vs. Mid Cap Funds

Both Flexi Cap and Mid Cap Funds aim for capital appreciation, but they differ in diversification and risk profile. Here’s a quick breakdown to help you decide:

• Risk Tolerance: If you’re comfortable with some volatility in exchange for potentially higher returns, Mid Cap funds might be suitable. For a more balanced approach, Flexi Caps could be a better fit.
• Investment Goals: Consider your investment horizon. Long-term goals can benefit from the potential growth of both Flexi Cap and Mid Cap funds.

Remember: Diversification is key! Regardless of your choice, consider including both Flexi Cap and Mid Cap funds (or other asset classes) in your portfolio for a well-rounded investment strategy.

Is Flexi Cap Fund Good?

 Flexi-cap funds can be a good option for long-term growth, offering diversification across market capitalizations (large, mid, small). This flexibility allows fund managers to potentially capture returns from different sectors throughout the market cycle.

However, they may carry more risk than large-cap funds. Consider your risk tolerance and investment goals before choosing a Flexi cap fund.

Which Flex cap fund is Best?

Choosing the best flexi cap fund depends on various factors like fund performance, consistency, and the expertise of the fund manager. It’s essential to look for funds with a proven track record of generating alpha over the long term.

Additionally, consider factors like expense ratio, fund house reputation, and the fund’s investment strategy. While past performance is not indicative of future results, it can provide insights into the fund’s capabilities.

It’s advisable to consult with a financial planner or conduct thorough research to identify a flexi cap fund that aligns with your investment goals and risk appetite.

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