Flexi-Cap Fund
An equity fund free to invest across large, mid and small-cap companies in any proportion.
How it is identified
Test: minimum 65% in equity with no mandated split across market capitalisation segments
Unit
qualitative
In depth
SEBI created this category in 2020 after tightening the multi-cap rules, giving managers back the freedom to hold whatever mix they judge appropriate. The freedom cuts both ways: it allows a manager to avoid an expensive segment, and it makes the fund's risk profile a moving target that the investor cannot see in advance. Most flexi-cap funds in practice hold a large majority in large-caps, so the flexibility is used less than the name implies. Comparing two flexi-cap funds means comparing their actual holdings, since the category label constrains almost nothing.
Worked example
One flexi-cap fund holds 85% large-caps and another 55%, with 30% in small-caps. Both carry the same label, and in a small-cap decline of 40% the second loses roughly 12 percentage points more from that segment alone.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Flexi-Cap Fund” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.