Flexicap funds invest across large, mid, and small-cap stocks, allowing the fund manager to adjust allocations based on market conditions based on his expertise and discretion. This flexibility can offer diversified exposure across market cap within a single fund, potentially balancing growth opportunities and risk.
In contrast, Large, Mid, or Small Cap funds focus on a specific market segment, which may result in more concentrated exposure and different risk-return profiles. As the names indicate, Large Cap Funds invest majority in large cap stocks, midcap funds in midcap stocks and small cap funds invest majority in small cap stocks as per the minimum allocation prescribed by the Securities and Exchanges Board of India (SEBI).
All these funds are equity-oriented funds investing in stocks and are considered as high-risk high-return funds. However, the relative risks may vary among these funds. Ex: Small cap funds are considered more riskier when compared to large cap funds. Ideally, an investor can choose a mix of these funds can be chosen based on the based on the amount of investment, time horizon. risk appetite and the objective of the investment. For those who find it difficult to choose can take the help of an advisor or a mutual fund distributor to build a resilient portfolio.
