Flexi cap mutual funds continued to dominate investor preference in April 2026, attracting a record inflow of Rs 10,147 crore, according to the latest data released by the Association of Mutual Funds in India (AMFI). The category witnessed a marginal 1% rise compared to Rs 10,054 crore received in March, but marked its highest-ever monthly inflow despite ongoing market volatility.The strong traction in flexi cap funds comes at a time when broader equity inflows moderated. Equity mutual fund inflows declined 5% month-on-month to Rs 38,440 crore in April from Rs 40,450 crore in March, while SIP contributions also slipped 3% to Rs 31,115 crore.Also Read |Mutual funds raise cash holdings by Rs 12,700 crore despite market rebound in April Market experts believe this increase in inflows reflect that investors are trusting fund managers to allocate based on the market situation and this is not a sign of caution but choosing flexibility.Pallav Agarwal, Certified Financial Planner at Bhava Services LLP, told ETMutualFunds that by preferring flexicap funds for investment, the investors are relying more on the fund managers to allocate between the market caps and not taking this call themselves and this is not a sign of caution but a sign of choosing flexibility over concentrated calls.Another expert, Nikunj Saraf, CEO, Choice Wealth shared with ETMutualFunds that the record inflow in April is not a new phenomenon — it reflects a deep-rooted investor preference for this category. Our data shows flexi cap has consistently commanded 26-32% of the total equity SIP book over the last four months — January at 31.9%, February at 26.6%, March at 24.8%, and April at 26.4%, this isn't caution — it's comfort, investors trust the fund manager to make the market-cap call for them, and with names like Parag Parikh Flexi Cap managing nearly Rs 1.41 lakh crore in AUM, the category has earned that trust.In April, around 45 flexi cap funds marked their presence and out of 45 funds, eight funds gave double-digit returns. Quant Flexi Cap Fund gave the highest return of 13.55% in April, followed by HSBC Flexi Cap Fund which gave 11.54% return. JioBlackRock Flexi Cap Fund, a relatively new entrant in the category, gave 6.89%. Parag Parikh Flexi Cap Fund, the largest fund in the category based on the assets managed, gave 5.73%. Should one increase allocation in these funds?Saraf said that Absolutely — incrementally increasing SIP allocations makes sense now. Valuations in large-caps are significantly more attractive post the January correction. To this Agarwal said that given the recent correction due to steep rise in crude oil prices, investors may increase allocation in flexicap funds here to benefit from attractive valuations Market cap allocationAccording to the market capitalisation allocation, flexi cap funds in April on an average are holding 64.70% in large caps, 13.64% in mid caps, 9.84% in small caps and 11.83% in others. Agarwal said that on an average basis, the allocation in largecap stocks stand around 70% with few funds sitting on significant cash positions as well. Saraf said that flexi cap funds, by structure, naturally tilt toward large-caps in uncertain environments — and that is exactly the right positioning today, given mid and small-cap valuations still carry a premium. As markets stabilize, fund managers will rotate back down the market-cap curve.Also Read | Samir Arora-backed Helios Flexi Cap Fund increases stake in Tata Motors, Eternal, Paytm, 8 others in April According to Suranjana Borthakur, Head of Distribution & Strategic Alliances at Mirae Asset Investment Managers (India), investors are increasingly using flexi cap funds as a core portfolio allocation because of their ability to participate across market segments without being restricted to a single market-cap category.Suitable for first time investors?First time investors always look for options to invest and look for options that generate the highest returns. With flexi cap funds having the freedom to invest across market capitalisations based on the market scenarios, Saraf said that it is arguably the best starting point for a first-time equity investor, the fund manager handles the large-cap vs mid-cap allocation dynamically, removing the most complex decision a new investor faces. He further said that with the top 3 flexi cap funds alone managing Rs 2.9 lakh crore — over 53% of total category AUM — the depth and track record here is well-established.Agarwal said that flexicap is the go-to category for first time mutual fund investors as they save the investors from taking market cap based investment decisions and rely on the fund managers to allocate and rebalance between the capitalisations.Active or passive flexi cap?There are three passive flexi cap funds of which one is index fund and the other two are FoFs. Motilal Oswal Diversified Equity Flexicap Passive FoF gave 10.34% in April, followed by Nippon India Diversified Equity Flexicap Passive FoF which gave 7.49% and DSP Nifty500 Flexicap Quality 30 Index Fund gave 6.29%.So with passive flexi cap funds generating similar returns in comparison to active flexi cap funds in April and losing or gaining in similar fashion like active flexi caps, which one should investors choose - active or passive flexi caps?Agarwal said that we have seen that many active flexicap funds have beaten the index funds in the long term and hence grown in size. The investors should prefer flexicap funds which have performed well consistently and may allocate 50-60% of their equity allocation in this category.Saraf said that index funds deliver market returns — nothing more. In a category where active managers like Parag Parikh have demonstrated consistent alpha over benchmarks across full market cycles, the case for active management is strong. Also Read | Jio Financial, ITC Hotels and Manappuram Finance among stocks bought and sold by mutual funds in April Passive strategies simply cannot replicate the dynamic market-cap flexibility that defines this category. Ideally, Flexi Cap should anchor 30-40% of your core equity portfolio, Saraf further said.The assets under management (AUM) of flexi cap funds was recorded at Rs 5.59 lakh crore in April registering a growth of 11% on a monthly basis from Rs 5.05 lakh crore in March.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in along with your age, risk profile, and Twitter handle.