DelhiDesk The article discusses the differences between three categories of equity mutual funds – multi-cap, flexi-cap, and focused equity funds. Multi-cap and flexi-cap funds offer exposure to a diversified group of stocks across market capitalizations, while focused equity funds have a concentrated portfolio of 20-30 stocks. Multi-cap funds have a mandated allocation of 25% each to small caps and mid-caps, while there is no such constraint on flexi-cap funds. Multi-cap and focused funds have the potential to deliver slightly higher long-term returns, while flexi-cap funds can provide returns that are in sync with large-cap indices. The choice of mutual fund depends on the investor’s risk appetite, investment horizon, and financial goals.
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Multi cap and flexi cap funds offer exposure to diversified stocks across market capitalizations
SEBI regulations mandate multi cap funds to maintain minimum 25% each in midcap, small cap, and large caps
Flexi cap funds offer more flexibility to fund managers to move between market caps
Focused equity funds follow a strategy of having concentrated portfolios, suitable for high-risk investors
Flexi cap funds provide returns in sync with large cap indices, while multi caps and focused funds have higher long-term return potential
Flexi cap funds are recommended for goals at least 5 years away, multi caps and focused funds require 7-10 years or more
Investors should set the right expectations and seek advice from a qualified advisor
Good performing mutual funds include Kotak Multicap Fund, Franklin India Focused Equity Fund, and UTI Flexi Cap
Choice of mutual fund depends on investor’s risk appetite, investment horizon, and financial goals.
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