<p>Flexicap funds attracted over Rs 30,000 crore in the first six months of 2025 - a significant milestone reflecting changing investor preferences and growing understanding that rigid investment approaches may not be optimal in today’s dynamic markets.</p>.<p>In the first half of 2025, large-cap stocks delivered 6.98% returns, mid-caps managed 4.25%, and small-caps delivered just 0.83%. This divergence highlights the challenge investors face when locked into specific market-cap categories. Well-managed Flexicap funds capitalised on these rotations, with several top-performing schemes delivering returns exceeding 20% in recent months. These aren’t lucky breaks - they’re the result of managers who can move money where opportunities actually exist.</p>.<p>In September 2020, SEBI issued a circular revising allocation rules for multi-cap funds, mandating they allocate at least 75% of total assets to equity instruments with a minimum of 25% exposure to large-cap, mid-cap, and small-cap equities each. This regulatory shift fundamentally changed the mutual fund landscape. Before this mandate, funds labeled as “large-cap” could invest significantly in mid and small-cap stocks without restrictions. SEBI’s October 2017 categorisation guidelines aimed to ensure funds remained true to their names, bringing much-needed clarity but also constraints.</p>.Bringing gold jewellery from abroad? Know your limits.<p>The creation of Flexicap funds as a separate category was SEBI’s solution to this rigidity. Flexicap funds must invest at least 65% of their assets in equity and equity- related instruments, but unlike multi-cap funds, they have no minimum allocation requirements across market capitalisations. In some periods, multi-cap funds have edged out flexicap funds, particularly when large-caps led the rally and flexicap managers chose to stay underweight in that segment. But this occasional underperformance is the price of flexibility, not a flaw. This regulatory paradox demonstrates that even flexibility can have drawbacks when market leadership concentrates in segments where fund allocation is constrained. Small and mid-cap stocks create real wealth when timing aligns. A small pharmaceutical company can multiply investments 10x with drug approval; a mid-cap tech firm can explode with major contracts. The challenge lies in timing these opportunities correctly.</p>.<p>Flexicap funds solve this puzzle professionally. When small-caps are cheap and unloved, managers can load up. When they become overheated, managers rotate into safer large-caps. I’s professional portfolio management bound by transparency requirements without rigid allocation constraints.</p>.<p>Markets today operate with increased complexity, where sector leadership and market-cap preferences shift more frequently than previous decades. Technology stocks may outperform one quarter while healthcare leads the next. Traditional fixed- allocation strategies often miss these rotational opportunities.</p>.<p>Currently, 39 Flexicap schemes manage Rs 4.35 lakh crore, making them the second-largest equity category after sectoral funds. However, sectoral funds are concentrated theme bets, while Flexicap funds offer diversified plays across entire market opportunity sets.</p>.<p>Investor interest, reflected in the Rs 31,532 crore inflow, signals recognition of one key truth: market leadership rotates faster than ever. From growth to value, domestic to export-led themes, Flexicap funds offer the ability to navigate these transitions without being boxed into a single style or sector.</p>.<p>For investors, the goal isn’t to time every move or bet on the right segment, i’s to stay invested in a strategy that adapts dynamically. Flexicap funds provide that adaptive edge, making them well-suited for long-term portfolios, especially when volatility and uncertainty are part of the equation.</p>.<p>When benchmark indices fell 10% from all-time highs recently, flexicap managers saw opportunities. Quality small and mid-cap stocks became available at discounted prices. While retail investors fled to fixed deposits, these managers selectively bought oversold segments.</p>.<p>For advisors and investors alike, Flexicap funds stand out by being able to lean in when others retreat.</p>
<p>Flexicap funds attracted over Rs 30,000 crore in the first six months of 2025 - a significant milestone reflecting changing investor preferences and growing understanding that rigid investment approaches may not be optimal in today’s dynamic markets.</p>.<p>In the first half of 2025, large-cap stocks delivered 6.98% returns, mid-caps managed 4.25%, and small-caps delivered just 0.83%. This divergence highlights the challenge investors face when locked into specific market-cap categories. Well-managed Flexicap funds capitalised on these rotations, with several top-performing schemes delivering returns exceeding 20% in recent months. These aren’t lucky breaks - they’re the result of managers who can move money where opportunities actually exist.</p>.<p>In September 2020, SEBI issued a circular revising allocation rules for multi-cap funds, mandating they allocate at least 75% of total assets to equity instruments with a minimum of 25% exposure to large-cap, mid-cap, and small-cap equities each. This regulatory shift fundamentally changed the mutual fund landscape. Before this mandate, funds labeled as “large-cap” could invest significantly in mid and small-cap stocks without restrictions. SEBI’s October 2017 categorisation guidelines aimed to ensure funds remained true to their names, bringing much-needed clarity but also constraints.</p>.Bringing gold jewellery from abroad? Know your limits.<p>The creation of Flexicap funds as a separate category was SEBI’s solution to this rigidity. Flexicap funds must invest at least 65% of their assets in equity and equity- related instruments, but unlike multi-cap funds, they have no minimum allocation requirements across market capitalisations. In some periods, multi-cap funds have edged out flexicap funds, particularly when large-caps led the rally and flexicap managers chose to stay underweight in that segment. But this occasional underperformance is the price of flexibility, not a flaw. This regulatory paradox demonstrates that even flexibility can have drawbacks when market leadership concentrates in segments where fund allocation is constrained. Small and mid-cap stocks create real wealth when timing aligns. A small pharmaceutical company can multiply investments 10x with drug approval; a mid-cap tech firm can explode with major contracts. The challenge lies in timing these opportunities correctly.</p>.<p>Flexicap funds solve this puzzle professionally. When small-caps are cheap and unloved, managers can load up. When they become overheated, managers rotate into safer large-caps. I’s professional portfolio management bound by transparency requirements without rigid allocation constraints.</p>.<p>Markets today operate with increased complexity, where sector leadership and market-cap preferences shift more frequently than previous decades. Technology stocks may outperform one quarter while healthcare leads the next. Traditional fixed- allocation strategies often miss these rotational opportunities.</p>.<p>Currently, 39 Flexicap schemes manage Rs 4.35 lakh crore, making them the second-largest equity category after sectoral funds. However, sectoral funds are concentrated theme bets, while Flexicap funds offer diversified plays across entire market opportunity sets.</p>.<p>Investor interest, reflected in the Rs 31,532 crore inflow, signals recognition of one key truth: market leadership rotates faster than ever. From growth to value, domestic to export-led themes, Flexicap funds offer the ability to navigate these transitions without being boxed into a single style or sector.</p>.<p>For investors, the goal isn’t to time every move or bet on the right segment, i’s to stay invested in a strategy that adapts dynamically. Flexicap funds provide that adaptive edge, making them well-suited for long-term portfolios, especially when volatility and uncertainty are part of the equation.</p>.<p>When benchmark indices fell 10% from all-time highs recently, flexicap managers saw opportunities. Quality small and mid-cap stocks became available at discounted prices. While retail investors fled to fixed deposits, these managers selectively bought oversold segments.</p>.<p>For advisors and investors alike, Flexicap funds stand out by being able to lean in when others retreat.</p>