Are Flexi-cap funds becoming a safer substitute for mid and small-cap exposure?

Flexi-cap funds, which offer the flexibility to allocate funds across large-, mid-, and small-cap stocks, are increasingly seen as a safer way to gain exposure to mid- and small-cap stocks.

Depending on the manager’s market outlook, these funds can tactically shift towards large caps for stability or lean into mid- and small-caps for higher growth potential, thereby ensuring active risk management and portfolio diversification.

Aakanksha Shukla, Assistant Vice President, Wealth Management, Master Capital Services, said, “A growing number of investors are turning to flexi cap mutual funds as a more balanced substitute for aggressive mid and small cap schemes. These funds give managers the freedom to move money across large, mid and small-cap stocks depending on market conditions, offering the twin benefits of growth potential and greater stability during turbulent times.”