Flexi Cap Funds have the freedom to dynamically shift its portfolio between large caps, mid caps, and small caps without any limits.
Depending on the valuations, economic conditions, and market cycles, the fund managers have much leeway in deciding whether to tilt the portfolio towards stable large caps or high growth potential mid and small caps.
This strategy enables flexi cap funds to better adapt to bearish and bullish market phases and thereby potentially deliver stable returns across market conditions.
For this very reason, flexi cap funds are often called ‘all-weather’ mutual funds, making them suitable for ‘core’ portion of investors’ portfolio.
In this editorial, we will look at the top 5 flexi cap funds based on risk-adjusted returns.
We have shortlisted these schemes based on a combined quantitative score which includes 6-month, 1-year, 3-year, and 5-year rolling returns along with risk-reward ratios such as standard deviation, sharpe, sortino, and up/down capture ratio.
#1 HDFC Flexi Cap Fund
Launched in January 1995, HDFC Flexi Cap Fund aims to identify fundamentally sound long-term winners and holds on to them even during tough times.
It adopts a blend of growth and value-driven investment strategies and avoids taking position on momentum-driven bets, helping it keep the volatility lower and offering a reasonable margin of safety.
As a result, it now stands among the top quartile performers in the category across various time frames.
In the last 3 years, HDFC Flexi Cap Fund generated returns at a CAGR of 23.2% on a rolling return basis compared to 17% generated by the Nifty 500 – TRI index.
In addition, the fund has registered lower volatility and has surpassed the benchmark and the category average on risk-adjusted returns.
As of 30 April 2026, it held 63 stocks in its portfolio. The fund held its top exposure in ICICI Bank, Axis Bank, HDFC Bank, SBI, and SBI Life Insurance Company accounting for 30.9% of its total assets.
Its top sector allocation includes bank, auto & ancillaries, and healthcare that collectively form 53.7% of its assets.
In the last one year, HDFC Flexi Cap Fund maintained an exposure of around 75% in large caps, along with 4-8% in mid caps, and 7-10% in small caps.
It has a low turnover ratio of around 10% in recent months, signalling strong conviction in the portfolio.
#2 Parag Parikh Flexi Cap Fund
Launched in May 2013, Parag Parikh Flexi Cap Fund is a value-oriented flexi cap fund that aims to invest in quality stocks available at reasonable valuations.
The fund maintains a diversified portfolio of high conviction, quality stocks with a preference for large caps. It also offers geographical diversification to its investors by holding a substantial portion of its portfolio in a few select global giants.
The fund’s emphasis on stocks having significant margin of safety has enabled it to limit the downside risk during uncertain/bearish market phases, and eventually benefit from capital appreciation in the long run.
In the last 3 years, Parag Parikh Flexi Cap Fund generated returns at a CAGR of 21.6% on a rolling return basis compared to 17% generated by the Nifty 500 – TRI index.
The volatility registered by the fund is the lowest in its category, while its Sharpe and Sortino ratios are currently the best among flexi cap funds.
As of 30 April 2026, Parag Parikh Flexi Cap Fund held 38 stocks in its portfolio with HDFC Bank, Power Grid Corporation of India, Coal India, ITC, and ICICI Bank among its top holdings. Among overseas equities the fund is invested in Alphabet Inc., Amazon.com, Facebook, Microsoft Corp.
Sector wise, the fund holds higher exposure in bank, IT, and power. It carried a moderate turnover ratio of 35-45% in the last one year.
The fund currently holds 64.2% in large caps, 1.5% in mid caps, 3.3% in small caps, 11.8% in overseas equities, and the balance debt instruments, REITs & InvITs, and cash.
#3 ICICI Pru Flexi Cap Fund
Launched in July 2021, ICICI Pru Flexi Cap Fund aims to invest in companies having strong business and economic fundamentals while focusing on valuation parameters.
The fund dynamically shifts exposure between large caps, mid caps, and small caps to capture market upside utilising a combination of top-down and bottom approach.
Despite being a relatively young fund, it stands strong beside its established peers, having delivered robust returns.
Due to its strong performance, it now stands as one of the largest funds in the flexi cap fund category.
In the last 3 years, ICICI Pru Flexi Cap Fund generated returns at a CAGR of 20.4% on a rolling return basis compared to 17% generated by the Nifty 500 – TRI index.
It has displayed volatility in line with the category average and has outscored the benchmark and the category average on risk-adjusted returns.
ICICI Pru Flexi Cap Fund currently holds 78 stocks in its portfolio. TVS Motor Company, ICICI Bank, Maruti Suzuki India, Avenue Supermarts, and HDFC Bank, currently figure among its top portfolio holdings.
Its top sectors are auto & ancillaries, banks, and retailing.
It has a moderate turnover ratio of around 20-35%, reflecting long-term buy-and-hold strategy.
The fund has currently allocated 61.2% in large caps, 8% in mid caps, and 24.8% in small caps.
#4 Aditya Birla SL Flexi Cap Fund
Launched in August 1998, Aditya Birla SL Flexi Cap Fund follows a combination of ‘top-down’ and ‘bottom-up’ approach to seek long-term opportunities in fundamentally sound stocks.
The fund has been agile enough to shift allocation between market caps to benefit from the available opportunities.
After witnessing a prolonged phase of muted performance, the fund has staged a comeback from 2024 onwards and has outpaced the benchmark and the category average.
In the last 3 years, Aditya Birla SL Flexi Cap Fund generated returns at a CAGR of 19.1% on a rolling return basis compared to 17% generated by the Nifty 500 – TRI index.
The fund’s volatility is marginally lower than the benchmark and the category average whereas it outscores them on risk-adjusted returns.
As of 30 April 2026, the fund held 78 stocks in its portfolio with the top 10 stocks accounting for 30.2% of its assets.
ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Reliance Industries, and Infosys find place among the fund’s top holding.
It holds most of its stocks with a long-term view and has recorded a moderate turnover of up to 25-35% in the last one year. Sector wise, the fund has invested predominantly in bank, auto & ancillaries, and healthcare.
In the last one-year Aditya Birla SL Flexi Cap Fund’s large-cap allocation stood at about 55-65% of its assets, along with 15-25% in mid-cap stocks, and 12-18% in small-cap stocks.
#5 Kotak Flexi Cap Fund
Launched in September 2009, Kotak Flexi Cap Fund prefers focusing on a few select sectors, which in the opinion of fund manager have solid prospects.
It aims to adopt a ‘top-down’ sectoral approach supplemented by ‘bottom-up’ stock picks.
Lead by a seasoned fund manager, Harsh Upadhyaya, the fund has the potential to benefit from his high conviction approach and a focus on ‘growth at reasonable price strategy’.
While the fund’s journey has been marked with ups and downs, the fund has delivered strong results over the long run.
In the last 3 years, Kotak Flexi Cap Fund generated returns at a CAGR of 18.3% on a rolling return basis compared to 17% generated by the Nifty 500 – TRI index.
The fund’s volatility is nearly in line with the benchmark and but slightly lower than the category average whereas its risk-adjusted returns are competitive to the category average.
As of 30 April 2026, the fund held 56 stocks in its portfolio with the top 10 stocks accounting for about 41.9% of its assets.
Bharat Electronics, HDFC Bank, ICICI Bank, SBI, and Jindal Steel find place among the fund’s top holding.
It holds most of its stocks with a long-term view and has recorded a low turnover of up to 10% in the last one year. Sector wise, the fund has invested predominantly in bank, auto & ancillaries, and engineering.
In the last one-year Kotak Flexi Cap Fund’s large-cap allocation stood at about 65-75% of its assets, along with 18-26% in mid-cap stocks and 4-5% in small-cap stocks.
| Scheme Returns | 3-Yr CAGR (%) | Std Dev | Sharpe | Sortino |
| HDFC Flexi Cap Fund | 23.19 | 12.03 | 0.33 | 0.61 |
| Parag Parikh Flexi Cap Fund | 21.56 | 9.10 | 0.37 | 0.77 |
| ICICI Pru Flexicap Fund | 20.39 | 14.12 | 0.27 | 0.46 |
| Aditya Birla SL Flexi Cap Fund | 19.08 | 13.09 | 0.28 | 0.54 |
| Kotak Flexicap Fund | 18.34 | 13.44 | 0.23 | 0.42 |
| Category Average | 18.06 | 14.14 | 0.23 | 0.42 |
| NIFTY 500 – TRI | 16.95 | 13.58 | 0.21 | 0.40 |
Source: ACE MF
Conclusion
Flexi Cap funds remain an attractive option for investors seeking growth through equities while maintaining flexibility across market caps and sectors.
However, they are not risk free and are prone to market fluctuations.
Thus, one should carefully select the schemes within the category, ideally preferring schemes with consistent long-term performance track records.
Additionally, consider opting for the SIP mode to invest in the category to minimise the impact of market volatility and to benefit from compounding of wealth over a period.
#Table Note: Data as of 19 May 2026
Rolling period returns are calculated using the Direct Plan-Growth option.
Returns over 1 year are compounded annually.
Standard Deviation indicates risk, while the Sharpe ratio and Sortino ratios measure risk-adjusted return.
They are calculated over 3 years, assuming a risk-free rate of 6% p.a.
Past performance is not an indicator of future returns.
The securities quoted are for illustration only and are not recommendations.
Happy investing.
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