Multi-Cap Vs Flexi-Cap Funds: Choosing the Right Fit for Your Portfolio
Last Updated:June 26, 2025, 15:26 IST
As equity mutual funds continue to gain traction among Indian investors, understanding the difference between Flexi-Cap and Multi-Cap funds is crucial.
Flexi-Cap vs Multi-Cap funds
Multi-Cap Vs Flexi-Cap Funds: Flexi-Cap and Multi-Cap funds are two popular equity-oriented schemes, both attracting significant net inflow according in last three month as per AMFI.
As per AMFI’s May 2025 data, Multi-Cap funds saw a net inflow of Rs 2,999.29 crore, while Flexi-Cap funds received Rs 3,841.32 crore.
As equity mutual funds continue to gain traction among Indian investors, understanding the difference between Flexi-Cap and Multi-Cap funds is crucial for informed investment decisions. Experts highlight that the key difference comes down to one word—freedom.
According to Navy Vijay Ramavat, Managing Director at Indira Group, Multi-Cap funds follow a SEBI-mandated structure—requiring a minimum 25% allocation each to large-, mid-, and small-cap stocks. This rule ensures disciplined diversification across company sizes, helping balance performance across market cycles. However, this structure also limits a fund manager’s flexibility in responding to market changes, which may increase the risk-reward intensity during volatile phases.
On the other hand, Flexi-Cap funds offer complete flexibility, as long as at least 65% of the assets are invested in equities. Fund managers can adjust allocations based on market conditions—going all-in on large-caps during downturns or shifting focus to mid- and small-caps during rallies. “My style aligns more with Flexi-Cap,” said Ramavat. “It allows me to move across segments depending on where I see opportunities.”
He added that sectors often matter more than market caps, and being nimble across segments creates opportunities—especially for short- to mid-term traders. “Cash is also a position,” he noted, highlighting the importance of timing and allocation.
Echoing this, Manish Kumar Goyal, Chairman and Managing Director at Finkeda, emphasised that Multi-Cap funds are ideal for investors who seek stable and balanced diversification with a rule-based approach. “Flexi-Cap funds are more suitable for those who want dynamic allocation based on market trends,” he said.
In summary:
Multi-Cap = Stable, rule-based allocation across all caps
Flexi-Cap = Dynamic, market-driven flexibility
Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
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