Both Multicap and Flexicap funds are types of equity mutual funds that invest across large, mid, and small-cap stocks, but they differ mainly in how they allocate their investments:
· Multicap funds must invest at least 75% of their assets in equities, with a mandatory minimum of 25% each in large-cap, mid-cap, and small-cap stocks as mandated by SEBI (Securities and Exchanges Board of India). This fixed allocation ensures balanced exposure to all three market segments regardless of market conditions making them more aggressive in approach.
· Flexicap funds are required to invest at least 65% in equities but have no fixed allocation requirements. Fund managers have the freedom to decide how much to invest in large, mid, or small-cap stocks, allowing them to adjust the portfolio dynamically based on market opportunities and risks.
