Flexi Cap Fund vs Multi cap Fund

Flexi Cap Fund and Multi Cap Fund are two types of equity mutual funds available in India. Both types of funds invest in a mix of large-cap, mid-cap, and small-cap companies, but there are some differences between them.

A Flexi Cap Fund is a type of equity fund that has the flexibility to invest across market capitalization segments based on market conditions. This means that the fund manager can invest in large-cap, mid-cap, or small-cap stocks based on their assessment of market conditions. As such, a Flexi Cap Fund can have a changing asset allocation over time depending on market conditions.

On the other hand, a Multi Cap Fund is a type of equity fund that invests in a diversified portfolio of stocks across market capitalization segments. The fund manager of a Multi Cap Fund has the freedom to invest in stocks of any market cap size, but there are certain regulations that require a minimum allocation in each category.

Flexi Cap Fund:

• Flexi-cap funds are those funds which invest in companies across the entire listed universe i.e. large-cap, mid-cap, and small-cap stocks.

• The fund manager assesses the growth potential of various companies regardless of its size and invests in them.

• Unlike Multi-cap funds, the Flexi cap fund has no minimum threshold for investments in Large, Mid and Small cap. The Fund Manager can manage the exposure dynamically.

Multi Cap Fund:

• Multi cap Funds are diversified mutual funds which can invest in stocks across market capitalization, but with pre-fixed limits.

• As per regulation, a Multi-cap Fund has to invest at least 75% of its total assets in equities, in the following manner:

  1. Minimum 25% in large-cap companies

  2. Minimum 25% in mid-cap companies

  3. Minimum 25% in small-cap companies

• The Fund is obligatory to maintain this equity allocation regardless of the market conditions.