Flexi-cap mutual funds continued to outpace other equity categories, recording the highest net inflows for the third consecutive month in October. According to Association of Mutual Funds in India (AMFI) data, these funds attracted Rs 8,928 crore in net inflows during October, surpassing large-cap, mid-cap, and small-cap segments. The ongoing preference for flexi-cap strategies is attributed to their adaptability across market cycles, as investors seek to remain invested in equities while retaining the flexibility to adjust allocations. Market participants are increasingly favouring these funds as a core portfolio holding, reflecting rising confidence in their ability to withstand volatility.
Analysts highlight that informed investors and those relying on professional advice tend to favour flexi-cap funds, given their disciplined, long-term investment strategies. This is evident in the redemption-to-gross-sales ratio for the category, which has been significantly lower than that of the wider equity mutual fund universe. On a year-on-year basis, inflows into flexi-cap funds increased by 72%, rising from Rs 5,180 crore in October 2024 to Rs 8,928 crore in October 2025. Month-on-month, inflows grew by 27%.
Flexi caps and market crashes
Performance data from Value Research shows that several major flexi-cap funds have delivered annualised returns exceeding 17% over the past decade, comfortably outperforming their benchmarks. This resilience is particularly notable during market downturns, where funds with superior downside protection have emerged as category leaders.
The Parag Parikh Flexi Cap Fund has distinguished itself as the most consistent downside protector in the category. According to data spanning five major market drawdowns over the past ten years, Parag Parikh featured among the top performers in four periods and was the leading fund in three. Its disciplined investment framework, including global exposure, enabled it to decline only 6.3% during the most recent correction, compared to an 18.6% fall in the Nifty 500 TRI. This level of protection shortens the recovery path during upturns, supporting stronger long-term returns.
HDFC Flexi Cap has emerged as the closest peer, ranking among the most resilient funds in three market corrections and topping the category once. Other notable managers include SBI, Tata, and Quant Flexi Cap, who have delivered strong performance in specific periods. However, Parag Parikh and HDFC Flexi Cap stand out for their consistency, and these two funds now represent India’s largest actively managed equity schemes, overseeing assets exceeding ₹2.1 lakh crore.
Industry experts note that the appeal of flexi-cap funds lies in their blend of stability and growth potential. Many of these funds maintain an inherent tilt towards large-cap stocks for safety, while seeking returns in mid- and small-cap segments when market conditions favour such moves. The broad mandate allows these funds to serve as a long-term foundation in portfolios, minimising the need for frequent switching between narrow market-cap strategies.
Flexi-Cap funds: Last 10 years
Crash 1: Mar 2015 – Feb 2016 (Nifty 500 TRI Index: –19.4%)
Fund Fall (%)
Parag Parikh Flexi Cap –7.9
SBI Flexicap –11.2
Motilal Oswal Flexi Cap –11.8
Franklin India Flexi Cap –12.7
Bandhan Flexi Cap –13.3
Crash 2: Aug 2018 – Oct 2018 (Index: –15.6%)
Fund Fall (%)
Parag Parikh Flexi Cap –11.5
Quant Flexi Cap –12.1
LIC MF Flexi Cap –12.6
Union Flexi Cap –13.6
HDFC Flexi Cap –13.8
Crash 3: Jan 2020 – Mar 2020 (Covid Crash, Index: –29%)
Fund Fall (%)
Axis Flexi Cap –18.4
Canara Robeco Flexi Cap –20.4
Parag Parikh Flexi Cap –21.4
Tata Flexi Cap –22.9
Quant Flexi Cap –23
Crash 4: Oct 2021 – Jun 2022 (Index: –16.9%)
Fund Fall (%)
HDFC Flexi Cap –9.5
ICICI Prudential Flexi Cap –10.5
Nippon India Flexi Cap –14.6
SBI Flexicap –15.3
Kotak Flexicap –15.8 (Data: Value Reserach)
How to choose which flexi cap fund to invest in
When selecting a flexi-cap fund, personal finance specialists stress the importance of sustained, risk-adjusted performance and proven management. Anshi Shrivastava, Head – Personal Finance Training at 1 Finance, stated: “When looking for a perfect flexi-cap fund for long-term growth, the focus should be on two key factors: 1. Consistent Performance: The fund should have made profits in the past, not by taking wild risks, but by giving good risk-adjusted returns. Evaluate risk-adjusted metrics like the Sharpe and Sortino ratios (Sharpe ratio: Measures how much extra return you get for every bit of ups-and-downs (volatility), and Sortino ratio: Measures how much extra return you get, but only looks at the market falls.) over the past 8 to 10 years. Consistent better performance across these ratios indicates steady profits with prudent risk management.”
Shrivastava added: “Choose a fund managed by an experienced professional with a proven track record across various market cycles. A manager who consistently outperforms peers is essential for navigating complexities successfully. If a flexi-cap fund clears these two filters, you can start your investment in it.”
Disclaimer: Business Today provides market and personal news for informational purposes only and should not be construed as investment advice. All mutual fund investments are subject to market risks. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.