Definition
Flexi-Cap Fund
A flexi-cap fund invests at least 65% in equities but can move freely across large-, mid- and small-cap stocks based on the fund manager's view.
SEBI created the flexi-cap category in 2020. Unlike multi-cap funds, there is no minimum allocation to each market-cap segment, so the manager has full flexibility to tilt the portfolio wherever they see opportunity.
This flexibility makes flexi-cap funds a popular core equity holding for many Indian investors. A skilled manager can shift toward large-caps for safety in a downturn or chase mid- and small-caps in a rally, but outcomes depend heavily on the manager's calls.
Related terms
- Large-Cap FundA large-cap fund invests at least 80% of its money in the top 100 companies by market capitalisation. These are India's biggest, most established businesses.
- Focused FundA focused fund holds a concentrated portfolio of at most 30 stocks, and must keep a high minimum of assets in equity under SEBI's rules.
- Multi-Cap FundA multi-cap fund must invest at least 25% each in large-cap, mid-cap and small-cap stocks, keeping a minimum 75% of assets in equity overall.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.