How-to flexi cap fund selection

How to select a flexi-cap mutual fund

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Flexi-cap fund selection is the most important single equity decision for most retail investors. It is the core portfolio holding; everything else is satellite. Pick well and hold long.

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Market-risk disclaimer. Mutual fund investments are subject to market risks. Past performance is not indicative of future returns. Flexi-cap drawdowns of 30-45% are normal.

Step-by-step procedure

See the procedure infobox above for the eight steps.

Flexi-cap vs multi-cap vs large & mid

CategoryMandate
Flexi-capAny market cap, manager’s discretion
Multi-capMin 25% each in large/mid/small
Large & MidMin 35% large + 35% mid

Flexi-cap = max manager flexibility. Multi-cap = forced diversification across caps.

See also

External references

References

  1. SEBI (Mutual Funds) Regulations, 1996.
  2. SEBI Categorisation Circular, October 2017 and subsequent flexi-cap circular.
  3. AMFI Best Practice Guidelines.

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