Top flexi-cap funds 2025: How these all-weather winners turned market volatility into 17% returns
Equities have been volatile this year, but flexi-cap funds have held their ground by adapting to shifting market trends. Flexi-cap funds combine adaptability with long-term discipline. These funds invest across large, mid, and small-cap companies, giving managers the flexibility to shift allocations as markets change. That freedom has helped several schemes deliver steady compounding through multiple market cycles.
While short-term results can vary, decade-long data show a clearer trend. Over the past ten years, several flexi-cap schemes have compounded at more than 17% annually, comfortably beating their benchmarks. For investors looking for sustained wealth creation through active management, these funds have proved resilient.
What are flexi-cap mutual funds?
A flexi-cap fund is a diversified equity scheme that can invest in companies of any size, large, mid, or small. Unlike other categories, it has no fixed allocation limits. Fund managers can adjust exposure depending on where they see the best balance between risk and opportunity.
For instance, during volatile phases, a manager might increase allocation to large-caps for stability. When valuations in mid or small-caps turn attractive, exposure can move there to capture higher growth. This dynamic allocation helps balance risk and reward across cycles.
Flexi-cap funds vs multi-cap funds
The key difference between flexi-cap and multi-cap funds lies in flexibility. Multi-cap funds must hold at least 25% each in large, mid, and small-cap companies as per SEBI rules. Flexi-cap funds, however, face no such constraint, allowing fund managers to adjust allocations freely based on market conditions.
In terms of portfolio management, flexi-cap funds primarily trade equities across sectors. It is important for investors to note that fund managers can also use derivatives such as index futures or options for short-term hedging. This is usually limited and tactical, aimed at cushioning volatility rather than boosting returns.
How to assess flexi-cap fund performance
Flexi-cap funds are best judged over a complete market cycle. One-year returns show how a fund handled recent volatility, but 10-year data reveal consistency. A fund’s long-term compound annual growth rate (CAGR) indicates how well it has compounded through different phases.
Expense ratio is another important factor. A moderate ratio gives flexibility for active management without dragging returns. Comparing a fund’s 10-year CAGR with its benchmark shows whether the manager’s approach has added value.
Based on data from the Financial Express Mutual Fund Screener, five flexi-cap schemes have maintained strong double-digit growth over the past decade while outperforming their benchmarks: Quant Flexi Cap Fund, Parag Parikh Flexi Cap Fund, JM Flexicap Fund, HDFC Flexi Cap Fund, and Edelweiss Flexi Cap Fund.
#1 Quant Flexi Cap Fund
Launched in October 2008 and managed by Quant Mutual Fund, the Quant Flexicap fund falls under the Very High Risk category. Since its inception, it has delivered a 20.65% CAGR. The fund’s NAV stands at Rs 110.59, with Rs 6,777 crore in assets.
Quant Flexi Cap is known for its data-driven and dynamic strategies. The managers frequently tweak sector weights and market-cap exposure in line with their internal models, a strategy that can look aggressive in the short term but has often paid off over longer cycles, as per its official website.
In the past one year, the fund gave a meagre return of 0.08%. Over 10 years, it compounded at 19.9%, outpacing its benchmark index, NIFTY 500 TRI, which grew at a CAGR of 13.5%. The fund’s expense ratio is 0.66%, in line with the category average, while its portfolio turnover ratio of 85 indicates active but not excessive trading.
#2 Parag Parikh Flexi Cap Fund
Launched in May 2013 by PPFAS Mutual Fund, the fund is tagged Very High Risk and has a CAGR of 19.94% since inception. Its NAV is Rs 95.25, and it manages Rs 1,19,723 crore (yes, you read that right!).
Parag Parikh Flexi Cap takes a measured approach. It favours quality businesses, stays invested for long periods, and includes a small allocation to overseas equities for diversification, as per the website. This conservative, research-led style has helped it perform steadily through volatile phases.
The fund returned 10.17% over the past year and compounded at 18.85% over 10 years, compared with 13.5% for the Nifty 500 TRI, the fund’s benchmark index. The fund has an expense ratio of 0.63%, relatively low for an actively managed scheme. Its portfolio turnover ratio of 37.19 shows a long-term, buy-and-hold approach.
#3 JM Flexicap Fund
Managed by JM Financial Mutual Fund, this Very High Risk scheme was launched in January 2013 and has generated 20.93% CAGR since inception. The fund’s NAV is Rs 114.27, and it oversees Rs 5,990 crore in assets.
JM Flexicap maintains a balanced exposure between mid and large-caps. The portfolio tends to rotate more actively than peers, giving the fund the agility to capture trends across sectors while controlling concentration risk.
In the last one year, it delivered a negative return of 0.52%. But when looked at from a decade timeline, it compounded at 18.19% versus 13.3% for the BSE 500 TRI, its benchmark index.
The expense ratio stands at 0.54%, among the lowest in its segment, and the portfolio turnover ratio of 159.96 reflects a high level of activity typical of its dynamic strategy.
#4 HDFC Flexi Cap Fund
HDFC Flexi Cap Fund, managed by HDFC Mutual Fund, is one of the oldest and largest in this category, launched in January 1995. It carries a Very High Risk tag and has delivered 16.97% returns since inception. Its NAV is Rs 2,278.43, and AUM stands at Rs 85,560 crore.
The fund typically leans towards large-cap companies and quality cyclicals, maintaining a steady, conservative bias. This approach has helped it manage drawdowns better while still participating in market rallies.
In the past year, it gave a return of 11.65%. Meanwhile, over 10 years, it has compounded at 17.04%, beating its benchmark Nifty 500 TRI, which gave an annualized return of 13.5% during the same period. The fund’s expense ratio is 0.70%, consistent with its size and active style, while a portfolio turnover ratio of 20.60 points to a steady, low-churn approach.
#5 Edelweiss Flexi Cap Fund
Edelweiss Flexi Cap Fund, launched in January 2015, is managed by Edelweiss Mutual Fund and classified as Very High Risk. It has delivered a 15.22% CAGR since inception. The fund manages Rs 2,842 crore with an NAV of Rs 45.82.
The scheme runs a steady allocation model, keeping portfolios diversified across sectors and market caps. This consistent positioning has helped it generate stable returns without extreme swings.
In the past year, it gave a moderate return of 6.09%. Meanwhile, during the 10 years, it compounded at 16.29% compared with 13.5% CAGR for the Nifty 500 TRI, benchmark for the fund. The expense ratio is 0.44%, one of the lowest in the category, and the portfolio turnover ratio of 42.00 suggests moderate activity with disciplined rebalancing.
Who can invest in a flexi-cap fund?
Flexi-cap funds suit investors who want diversified equity exposure through a single scheme. They are ideal for those who prefer to let professional managers decide how to allocate between large, mid, and small-caps as markets evolve.
These funds work best for investors with a moderate-to-high risk appetite and a long-term investment horizon. The longer duration gives managers the flexibility to navigate cycles and build compounding gradually.
They can also serve as a core equity holding for long-term goals such as retirement or wealth creation. For SIP investors, flexi-cap funds offer an adaptive, all-weather strategy that adjusts automatically with market dynamics.
The investor’s takeaway
Flexi-cap funds continue to show that adaptability works over time. The top schemes have maneuvered multiple market cycles while maintaining consistent double-digit compounding. Their freedom to shift between large, mid, and small-cap exposures has helped smooth volatility and build lasting value.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.