What is a Flexi-Cap Mutual Fund - MyRupaya Explains

Introduction

Flexi-cap funds are mutual funds which invest in companies across the breadth of the stock market irrespective of the market capitalisation of the company, unlike large-cap, mid-cap or small-cap funds they are not restricted to companies of a particular size. Further under law they are mandated to have minimum investment in equity & equity related instruments aggregating to 65% of total asset

Flexi-Cap Fund: What You Need to Know

Flexi-cap funds may invest in any business, regardless of its market capitalization, unlike mid-cap or small-cap funds, which focus on equities depending on their market capitalization.

No matter how big or small a company is, the fund manager looks for growth potential and makes investments in a variety of different market areas and firms.

Factors to Take into Account

The fund manager has the option to change the allocation of the funds based on the performance of various firms and sectors.

Fund managers can shift their allocations to a better-performing market segment, for example, if they find that a specific market segment in which they had invested has become unappealing over time. This provides investors the opportunity to invest in the best-performing stocks while also having the flexibility to get out if the stock isn't performing well.

A company's market capitalization affects which mutual funds invest in it, a large-cap fund cannot invest in a small company no matter how good the opportunity is, however, flexi-cap funds are free from such restrictions and can invest in any company.