Do you want to invest in stocks ranging in market capitalisation? Do you wish to construct your portfolio in a flexible manner? You could look at Flexi-Cap Funds. It is a type of mutual fund that invests in large-cap, mid-cap, and small-cap stocks without regard for size. Depending on market conditions, fund managers maximize exposure to a specific market segment.
Flexi Cap funds are all-purpose funds. Parag parikh flexi cap fund has delivered on its promise. It has not only taken advantage of the flexibility given by the Flexi cap category, but it also provides its investors with an internationally diversified portfolio. As a result, the recent dip in the fund’s performance should not concern investors. Short-term underperformance has never been a problem for the fund.
The fund’s portfolio is well-diversified, and it has demonstrated the ability to provide a good risk-adjusted return over the long term. Furthermore, as an investor, you should not be concerned about SEBI’s recent ban on investment in overseas equities. It may be lifted as soon as the RBI raises the investment limits.
Its characteristics are comparable to those of multi-cap funds.
As a result, flexi-cap funds provide broad exposure to companies with varying market capitalizations, allowing fund managers to engage across industrial sectors. These funds are suited for moderate investors are looking for long-term investments that will build money in five to seven years.
Are Flexi-Cap Funds a Good Investment?
Flexi-cap schemes seek for long-term wealth growth by focusing on several industry segments. Given that market volatility is prevalent, May be advantageous.
Furthermore, the scheme’s diverse portfolio may defend against an unanticipated decrease in a specific asset owing. For example, the fund provides for reducing its allocation to riskier areas to the bare minimum during a market correction.
Keep 80% of their capital in large-cap equities at all times, flexi-cap funds can reduce their equity holdings to 65%.
Why are Flexi Cap Funds advantageous to you?
- Portfolio Diversification
The Flexi Cap Funds portfolio invests throughout the market capitalisation. This indicates that your primary equities portfolio may have a diversity advantage in the long run.
- A favorable risk-reward ratio
Flexi Cap Funds get diverse range of equity sectors and firms. This could result in a portfolio with a good mix of equities that generates reasonable returns. Furthermore, if invested for the long term, this fund provides significant flexibility in managing market volatility risk.
- Captures Market Cap Opportunities
Flexi Cap Funds have the ability to move across market caps and capitalize on opportunities in each market cap segment.
One of the most popular Flexi Cap funds is Parag Parikh Flexi Cap. Within 18 months, its assets under management (AUM) increased fourfold. With an AUM of Rs 22,647 crore, the fund is now the fifth largest in the category. However, the fund is one of the ten worst performing Flexi Cap Funds this year. This year, the fund has returned -3.85%, while the Flexi Cap category average return is around 0.19%.
Should investors be concerned about the recent dip in performance of the Parag Parikh Flexi Cap Fund? We will evaluate the fund’s long-term performance and investment strategy in this fund review of the Parag Parikh Flexi Cap fund to help you decide.
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