When it comes to investing in mutual funds, there are various types of fund options, ranging from active funds vs passive funds to large-cap, mid-cap, and small-cap funds. But there’s one fund that’s making quite some news and creating interest among all investors including residents, Non-Resident Indian(NRI), and Overseas Citizen of India(OCI), it’s flexi cap funds. So what are flexi cap funds and why are investors interested in this fund? Find all you need to know about flexi cap funds, meaning, features, benefits, how to invest, and top flexi cap funds for NRIs in this blog.
What are Flexi Cap Funds?
Flexi cap funds as the name suggests are flexible in terms of investment. They invest in companies of all sizes, including large-cap, mid-cap, and small-cap stocks. They have the flexibility to invest across the entire market capitalization spectrum, providing diversification across various types of companies. A flex-cap fund offers investors the chance to spread their investments across companies of varying market capitalizations, reducing risk and unpredictability.
They are also known as diversified equity or multi-cap funds and aren’t restricted by company size, unlike mid-cap or small-cap funds. The fund manager evaluates growth potential across different companies and market segments, allowing investment in companies of any size. This approach offers flexibility and diversification to investors which helps to manage risk effectively.
Also read: What are Balanced Funds, Benefits and How to Invest?
Key Features of Flexi Cap Funds
- Diversification Across Market Caps: Flexicap funds do not limit themselves to a particular segment of the market. This flexibility allows the fund manager to optimize the portfolio by investing in companies of varying sizes, potentially enhancing returns while mitigating risks.
- Dynamic Allocation: The allocation to large-cap, mid-cap, and small-cap stocks can change based on market trends and economic conditions. This dynamic approach aims to capitalize on growth opportunities while protecting the portfolio during market downturns.
- Active Management: Flexicap funds are actively managed, meaning the fund manager plays a crucial role in making investment decisions. The manager’s expertise and strategic vision are instrumental in navigating market fluctuations and identifying lucrative investment opportunities.
Also read: Aggressive Hybrid Funds for NRI: Meaning, Benefits, Taxation & How to Invest
Benefits of Flexi Cap Funds
- Flexibility: Investors like these because they can invest in a variety of things without being limited to specific types of companies, like big or medium-sized ones. It gives them more freedom to choose where to put their money.
- New Category: It is a new type of fund, introduced in November 2020, called flexi cap funds. They’re like an upgraded version of multi-cap funds, without the restrictions. Unlike multi-cap funds, where a certain percentage of assets must be invested in each category (small cap, mid cap, and large cap), flexi-cap funds have no such limitations. They’re completely flexible, allowing investors to allocate their money as they see fit across these categories.
- Good returns: Flexicap funds have the potential to deliver higher returns due to their ability to invest in a broad range of stocks. Going by the numbers they provided a better return than those of broader indexes.
- Adjusting Investments to Market Trends: These flexi cap funds, when the market is going strong, can increase the portion of the fund invested in small and mid-sized companies. But when the market is consolidating, they can put the funds into larger, steadier companies. This flexibility to adjust the allocation isn’t something you’ll find in other types of funds like hybrid funds. So, it gives them an edge in navigating different market conditions.
Also read: How understanding the Rule of 8-4-3 can turn your Rs 30,000 monthly into Rs 1.5 cr?
Who Should Invest in Flexicap Funds?
Flexicap funds are ideal for investors who:
- Seek Diversification: Investors looking to diversify their portfolio across different market caps.
- Aim for Long-Term Growth: Those with a long-term investment perspective and can withstand short-term market volatility.
- Prefer Professional Management: Individuals who prefer to have their investments managed by professionals.
- Desire Flexibility: Investors who want a fund that can adapt to changing market conditions.
Also read: 𝗕𝗲𝘀𝘁 𝗠𝘂𝘁𝘂𝗮𝗹 𝗙𝘂𝗻𝗱𝘀 for NRI in India 2024
How to Invest in Flexi Cap Funds as NRI/OCI?
NRIs can legally invest in different mutual funds schemes in Indian markets. This includes NRIs, Persons of Indian Origin (PIOs), and Overseas Citizens of India (OCIs). There are a few legal mandates like getting their Mutual Fund KYC done along with adhering to the rules of FEMA, SEBI, and RBI. Once your KYC is done, you can invest in domestic and international mutual fund schemes offered by Asset Management Companies (AMCs) via SIPs or lump sum.
Getting your Mutual Fund KYC is mandatory to open an account to invest in mutual funds in India irrespective of the investment amount. The Securities and Exchange Board of India (SEBI) has specified a set of regulations under the Prevention of Money Laundering Act (PMLA), 2002 which mandates that mutual fund houses and intermediaries perform their due diligence on investors before they are compliant to make investments.
For more info on NRIs, PIOs, and OCIs, you can refer here.
Also read: Step-by-Step Guide for NRIs to Pick a Winning Mutual Fund
Top 10 Flexi Cap Funds for NRIs in 2024
| Fund Name | Fund Size (In Crores) | Expense Ratio | 1 YR | 3 YR |
| Quant Flexi Cap Fund Growth for NRI | 5,563 Cr | 1.8% | 57.51% | 28.01% |
| JM Flexicap Fund Growth for NRI | 2,107 Cr | 2.0% | 66.11% | 30.60% |
| HDFC Flexi Cap Fund Growth for NRI | 52,874 Cr | 1.5% | 42.31% | 25.90% |
| Franklin India Flexi Cap Fund Growth for NRI | 15,267 Cr | 1.7% | 43.71% | 22.58% |
| Parag Parikh Flexi Cap Growth for NRI | 63,934 Cr | 1.3% | 36.97% | 21.19% |
| Edelweiss Flexi Cap Fund Growth for NRI | 1,785 Cr | 2.0% | 40.91% | 20.82% |
| HSBC Flexi Cap Fund – Growth for NRI | 4,399 Cr | 1.9% | 42.90% | 20.62% |
| Union Flexi Cap Fund Growth for NRI | 1,987 Cr | 2.1% | 39.83% | 20.35% |
| DSP Flexi Cap Fund Growth for NRI | 10,409 Cr | 1.8% | 35.83% | 16.85% |
| Kotak Flexicap Fund Growth for NRI | 47,466 Cr | 1.5% | 35.55% | 18.27% |
Wrapping Up
Flexi cap funds offer a versatile and dynamic investment option for those looking to diversify their portfolio and capitalize on growth opportunities across the market capitalization spectrum. With professional management and the ability to adapt to market conditions, these funds provide a balanced approach to achieving long-term financial goals.
Also read: What is the 15x15x15 Rule In Mutual Funds for NRIs?
Invest in NRI Mutual Funds with SBNRI
NRIs can now download the SBNRI App and choose to invest in different NRI mutual fund schemes in India with ease. You can also get detailed mutual fund advice from experts at SBNRI. Also, visit our blog and YouTube channel for more details.
SBNRI is an authorized Mutual Fund Distributor platform & registered with the Association of Mutual Funds in India (AMFI). ARN No. 246671. NRIs willing to invest in mutual funds in India can download the SBNRI App to choose from 2,000+ mutual fund schemes or can connect with the SBNRI wealth team to better understand Mutual Fund investments.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions. SBNRI does not intend to predict future returns, please read all related documents before investing.
FAQs
What is a Flexi Cap fund?
- Flexi-cap funds are like all-in-one package funds. They invest in companies of all sizes – big, medium, and small. So, when you invest in them, you’re getting a piece of all kinds of companies, not just one size.
Which Flexicap fund is best?
- Here is the list of top flexi funds:
- Quant Flexi Cap Fund Growth Option Direct Plan
- JM Flexicap Fund (Direct) Growth Option
- Bank of India Flexi Cap Fund Direct Growth
- HDFC Flexi Cap Fund -Direct Plan – Growth Option
- Franklin India Flexi Cap Fund Direct Growth
What is the return rate of the Flexi Cap fund?
- The current value of the Quant Flexi Cap Fund’s Growth option in its Regular plan is Rs 97.40 as of May 06, 2024. Over different periods, its returns are 56.53% in the past year, 31.18% in the past 3 years, 30.67% in the past 5 years, and 15.8% since its launch.
Which is better: Midcap or Flexicap?
- Both flexi cap funds and mid cap mutual funds tend to perform well over the long term. However, your choice should depend on your investment period. Flexi cap funds, with their flexibility, might be more suitable during uncertain periods.
