Mutual Funds: What Are Flexi-Caps And How To Invest In Them? | Savings and Investments News

Flexi-cap funds continued to dominate investor interest, drawing Rs 7,029 crore in September.

India’s popular mutual fund category, flexi-cap mutual funds, has achieved a major milestone. The latest data from the Association of Mutual Funds in India (AMFI) released earlier this month showed that the total assets under management (AUM) in flexi-cap funds crossed the Rs 5 lakh crore mark as of September 30, 2025, making it the largest mutual fund category by asset size.

Investor interest in the segment remains strong. Flexi cap funds saw the highest net inflows among all categories in September, at Rs 7,029 crore, underscoring their growing appeal.

What Are Flexi-Cap Funds?

Flexi-cap mutual funds are equity funds that give fund managers complete freedom to invest across companies of all sizes — large-cap, mid-cap, and small-cap — depending on where they see the best opportunities. This flexibility allows them to adjust the portfolio based on market conditions. For example, when large-cap stocks look more stable, they can invest more there; when mid- or small-cap stocks offer better growth potential, they can shift accordingly. This makes flexi-cap funds a balanced option for investors seeking long-term growth with a mix of stability and returns.

Top-Performing Flexi-Cap Mutual Funds

Among the top-performing funds, HDFC Flexi Cap Fund leads the pack with an absolute five-year return of 255% and nearly 350% over the past decade. The JM Flexi Cap Fund followed with an absolute return of 217%, while the Edelweiss Flexi Cap Fund delivered a 165% return during the same period.

What Makes Flexi-Caps Popular?

Analysts said the appeal of flexi cap funds lies in their investment flexibility. As the name suggests, these funds can dynamically allocate investments across large-cap, mid-cap, and small-cap stocks, depending on market conditions and opportunities.

However, financial advisors also sound a note of caution.

“Just like any other category of mutual funds, investing in flexi-cap funds comes with its own risks. Investors should choose funds with a proven track record and a consistent history of performance,” said D D Sharma, managing director of MF King.

On the increased use of artificial intelligence, Kapil Holkar, founder & CEO of Equations, said, “Nothing can replace the experience and track record of a skilled fund manager.”

Value Research, India’s largest mutual fund analytics platform, recently assessed the five-year rolling returns of flexi cap funds with at least a 10-year history. The findings also reinforced sticking with the funds that have demonstrated consistent performance.

How To Invest In Flexi-Cap Mutual Funds?

You can invest in flexi-cap mutual funds either through a lump sum (a one-time investment) or via a Systematic Investment Plan (SIP), where you invest a fixed amount every month. SIPs are popular as they help you invest regularly and average out market fluctuations over time. To start, you can invest directly through the mutual fund’s official website, asset management company (AMC) portal, or through trusted mutual fund platforms and apps.

Before investing, check the fund’s past performance, expense ratio, and fund manager’s track record. Also, make sure the fund aligns with your financial goals, investment horizon, and risk tolerance.

Mutual Fund Data For September 2025

According to the latest AMFI data for September 2025, equity-oriented mutual fund categories recorded net inflows of Rs 30,422 crore in September 2025, marking the second consecutive month of moderation after July’s record tally of Rs 42,703 crore and August’s inflows of Rs 33,430 crore. While the pace of inflows softened, the overall trend continues to reflect sustained investor confidence in equities, supported by steady SIP contributions and retail participation. Investors remained undeterred by intermittent market volatility and global uncertainties, reaffirming their long-term commitment to equity investing. The moderation in monthly flows, therefore, appears cyclical rather than structural, coming after exceptionally strong inflows in July and August.

Flexi-cap funds continued to dominate investor interest, drawing Rs 7,029 crore in September. This marked the third consecutive month of strong inflows, underscoring the enduring appeal of flexible strategies that can dynamically allocate across market caps. Mid- and small-cap funds also remained strong contributors, garnering Rs 5,085 crore and Rs 4,363 crore, respectively, although both categories witnessed a mild slowdown compared to August as investors turned slightly cautious after the sharp rally in smaller stocks.

Large- and mid-cap funds continued to attract steady allocations of around Rs 3,805 crore, benefiting from investors seeking balanced exposure across segments, while large-cap funds saw moderate inflows of Rs 2,319 crore, indicating a more measured approach at elevated valuations.