Mutual Funds: Here's A List Of Flexi-Cap Funds With Maximum Returns Of Up To 21% In 10 Years; Names?

If you're considering investing in a mutual fund scheme, there are several factors to consider, such as the type of scheme, the reputation of the fund house, and the fund's size. However, one of the most critical factors that can sway your decision is the past performance of the scheme. The flexi-cap category of mutual funds, which allows investment across largecap, midcap, and smallcap stocks, has shown solid returns in the past decade.

Flexi-Cap Funds

Flexi-cap mutual funds are dynamic equity schemes mandated to invest at least 65% of their corpus in equity and equity-related instruments. What makes these funds stand out is their flexibility to invest across various market capitalizations, allowing fund managers to shift between largecap, midcap, and smallcap stocks depending on market conditions. This approach gives them an advantage over other funds that may be restricted to a specific market cap.

The Securities and Exchange Board of India (SEBI) introduced the flexicap category via a circular dated November 6, 2020, giving mutual fund houses the option to convert existing schemes into flexicap funds. Since its inception, this category has gained significant traction. As of August 31, 2024, there are 39 flexicap schemes, with total assets under management (AUM) amounting to Rs 4.29 lakh crore. It ranks as the second-highest category among equity-oriented funds, trailing only sectoral/thematic funds, which boast a total AUM of Rs 4.449 lakh crore.

This category has become popular with retail investors, with over 1.56 crore folios under its belt, according to data from the Association of Mutual Funds in India (AMFI). Flexi-cap funds offer the versatility of investing in diverse sectors and market caps, which makes them suitable for long-term investors seeking stable returns over time.

The Top 10 Flexi-Cap Mutual Funds

When looking at the top performers in the flexi-cap category over the past 10 years, a few schemes have consistently delivered impressive annualized returns of over 15%. This means that if someone had invested Rs 1 lakh in one of these top-performing funds a decade ago, their investment would have grown to over Rs 4.04 lakh, assuming a 15% return.

Here are the top-performing flexi-cap mutual funds based on their 10-year returns:

Quant Flexi Cap Fund - 21.17% annualized return
JM Flexi Cap Fund - 18.5% annualized return
Parag Parikh Flexi Cap Fund - 18.44% annualized return
HDFC Flexi Cap Fund - 15.70% annualized return
Kotak Flexi Cap Fund - 15.35% annualized return
These funds have outpaced broader market benchmarks and provided significant wealth-creation opportunities for investors.

Among the best performers, Quant Flexi Cap Fund leads the pack with a stellar 10-year return of 21.17%. JM Flexi Cap Fund and Parag Parikh Flexi Cap Fund also demonstrated robust returns.

While returns are crucial, the size of the fund also matters, as it can indicate investor confidence and the fund's ability to manage large-scale investments. Parag Parikh Flexi Cap Fund and HDFC Flexi Cap Fund are the largest schemes in this category, boasting significant assets under management. Larger funds can often provide stability, but they also have to manage the challenges of scale when it comes to finding high-growth opportunities.

While these top-performing funds have delivered outstanding returns in the past decade, it's important to note that past performance doesn't guarantee future results. The mutual fund industry is subject to market risks, and fund performances can vary based on economic conditions, government policies, and market trends. For example, market downturns or changes in the economy may negatively affect future returns, regardless of past successes.

Retail investors should also consider other factors, such as the fund manager's track record, the expense ratio, the fund's portfolio diversification, and how well it aligns with their financial goals.