Flexi-cap Mutual Funds Show Strong Performance, Assets Under Management Cross ₹5 Lakh Crore

Flexi-cap mutual funds are open-ended equity schemes that allow fund managers to invest in companies of all market capitalizations – large, mid, and small – without fixed allocation limits. This strategy enables them to adapt to market conditions and opportunities. As per SEBI guidelines, these funds must invest at least 65% of their assets in equities.

The appeal of flexi-cap funds lies in their dynamic allocation strategy, market-driven approach, and inherent diversification, making them suitable for long-term investors (5+ years) seeking high risk and high reward.

According to the Association of Mutual Funds in India (AMFI), the total Assets Under Management (AUM) for flexi-cap funds touched ₹5.07 lakh crore in September 2025, positioning it as the second-largest category after sectoral/thematic funds. This growth highlights investor confidence in the category.

Among top performers, HDFC Flexi Cap Fund has shown strong momentum over 1, 3, and 5-year periods. Parag Parikh Flexi Cap Fund stands out as the most consistent long-term performer, especially over a 10-year horizon with an impressive Compound Annual Growth Rate (CAGR).

Other notable funds include Aditya Birla Sun Life Flexi Cap Fund and Kotak Flexicap Fund, which offer steady, diversified returns.

Impact: This news reinforces investor confidence in the flexi-cap category, potentially leading to increased inflows into these funds and their respective Asset Management Companies. It guides investors in selecting diversified, high-growth potential investment vehicles.

Impact Rating: 7/10

Difficult terms: Flexi-cap fund: An open-ended equity mutual fund that can invest across large-cap, mid-cap, and small-cap stocks without any fixed allocation limits. Market capitalisation: The total market value of a company's outstanding shares, used to categorize companies as large-cap, mid-cap, or small-cap. Open-ended equity mutual fund: A type of mutual fund that is available for purchase or redemption at any time, and invests primarily in stocks. Assets Under Management (AUM): The total market value of all assets managed by a mutual fund or investment firm. SEBI: Securities and Exchange Board of India, the regulatory body for securities markets in India. Equities and equity-related instruments: Investments that represent ownership in a company (stocks) or instruments derived from them. CAGR (Compound Annual Growth Rate): The mean annual growth rate of an investment over a specified period of time longer than one year. Benchmark Nifty 500 TRI (Total Return Index): An index representing the performance of the 500 largest Indian companies, including reinvestment of dividends. Expense ratio: The annual fee charged by a mutual fund to cover its operating expenses, expressed as a percentage of AUM. Cyclical sectors: Industries whose performance is tied to the overall economic cycle, such as manufacturing or materials. Defensive sectors: Industries that tend to perform relatively well during economic downturns, such as consumer staples or healthcare.