A multi-cap fund gives a minimum 25% fixed allocation to each: large, mid, and small-cap stocks. It ensures diversification, but with limited flexibility for the fund manager. In a flexi-cap fund, the fund manager allocates dynamically to large, mid, and small-cap stocks, based on market conditions.
As per the AMFI March 2026 mutual fund data released in April 2026, the flexi-cap mutual fund category attracted inflows of Rs. 10,054 crores. Within the equity mutual funds category, flexi-cap funds recorded the largest inflows for the eighth consecutive month. So, what are flexi-cap funds, how are they different from multi-cap funds, how have they performed, and which one should an investor choose? We will discuss all these points in this article.
What is a flexi-cap mutual fund?
A flexi-cap fund is an open-ended equity fund that invests a minimum of 65% of its total assets in equity and equity-related instruments. The fund invests across large, mid, and small-cap stocks, with no minimum fixed allocation rule for each category. The fund manager allocates dynamically to each category based on market conditions.
A flexi-cap fund provides the fund manager with the much-needed flexibility to adapt to changing market conditions. For example, during a broader bull run, usually mid and small-cap stocks outperform. During such times, the fund manager can increase allocation to these categories.
