Flexi cap funds: HDFC, Franklin Flexi Cap funds deliver 17%+ CAGR — Here’s how they compare

Flexi-cap funds are stealing the spotlight amid global volatility and FII exits, as retail investors seek stability. AMFI’s November data highlights Rs 8,135 crore of inflows into this category—the top performer—down marginally from October’s Rs 8,928 crore. With AUM nearing Rs 5 lakh crore, flexi-caps’ decade-plus record of solid returns across market caps explains the rush.

Investors are ditching volatile small- and mid-cap funds for this versatile option that blends growth with prudence. It’s a savvy move in choppy waters, say market watchers. Here, we compare two of the oldest funds in the market—HDFC Flexi Cap Fund and Franklin India Flexi Cap Fund—which are among the most widely tracked flexi-cap equity schemes. While both give fund managers the freedom to invest across large-, mid- and small-cap stocks, their journey, scale, portfolio construction and investor appeal differ in important ways.

Scale and investor base

HDFC Flexi Cap Fund stands out for its sheer size. With assets under management of over Rs 910 billion, it is the largest fund in the flexi-cap category. Its scale reflects strong investor confidence built over decades and steady inflows from both retail and institutional investors. Franklin India Flexi Cap Fund, in comparison, manages a much smaller corpus of around ₹20,000 crore. However, its relatively modest size has not limited its impact, as the fund has consistently rewarded long-term investors since its launch in 1994.

Investment mandate and approach

Both funds operate under a flexible mandate, but their execution differs. HDFC Flexi Cap allocates 65–100% of its assets to equities across market capitalisations and supplements this with selective use of derivatives for hedging. It also maintains exposure to debt instruments, money markets, REITs and InvITs for defensive positioning and diversification. This multi-asset flexibility allows the fund to manage risk actively during volatile phases.

Franklin India Flexi Cap follows a more straightforward, equity-focused strategy. The fund manager has complete freedom to move between large-, mid- and small-cap stocks depending on valuations and growth opportunities. The emphasis is on identifying businesses with long-term potential rather than tactical allocation shifts, resulting in a disciplined, buy-and-hold style across market cycles.

Portfolio composition and risk profile

HDFC Flexi Cap typically holds a diversified portfolio of about 50–55 stocks, with a pronounced large-cap bias. As of October 2025, nearly three-fourths of its portfolio was invested in large-cap companies, offering stability and liquidity. This approach has helped keep volatility lower than the category average, with a standard deviation of 10.52% and strong risk-adjusted performance, as reflected in its Sharpe and Sortino ratios.

Franklin India Flexi Cap runs a relatively high-conviction portfolio with lower churn. Its portfolio turnover of around 21% indicates patience and long-term conviction in stock selection. The fund’s risk metrics underline this approach, with a low standard deviation of 3.57% and a Sharpe ratio of 0.94, pointing to smoother returns over extended periods.

Performance across time horizons

On long-term performance, Franklin India Flexi Cap has built a reputation as a consistent wealth creator. Since inception, it has delivered a lump-sum CAGR of 17.86%, turning a ₹10,000 investment into nearly ₹17 lakh over 31 years. Its SIP performance is even more striking: a monthly investment of ₹2,000 since launch has grown into a corpus of about ₹3.5 crore, demonstrating the power of disciplined investing over time.

HDFC Flexi Cap has also delivered strong long-term returns, with a since-inception CAGR of 17.2%. In recent years, the fund has shown particularly strong momentum, posting impressive rolling returns over three, five and seven years and outperforming both the category average and its benchmark, the Nifty 500 TRI.

HDFC Flexi Cap Fund vs Franklin India Flexi Cap Fund

Which fund suits whom

HDFC Flexi Cap Fund may appeal to investors looking for scale, diversification and relatively lower volatility, backed by a robust investment process and risk management framework. Franklin India Flexi Cap Fund, on the other hand, suits patient investors who prioritise long-term compounding, consistency and a value-driven approach.

Both funds have proven their merit over decades. The choice ultimately depends on whether an investor prefers the comfort of size and diversification or the discipline of long-term, high-conviction investing.