Flexi Cap Funds Performance Review (3Y, 5Y, 10Y, Since Launch)

Introduction

When investors want to play it safe, they usually prefer large-cap funds, which invest in big, stable companies that offer steady growth with relatively lower risk. On the other hand, when investors are willing to take higher risk for potentially higher returns, they choose mid-cap or small-cap funds, which invest in faster-growing but more volatile companies. But what if you want a combination of stability and growth, without locking yourself into one category? That’s where Flexi-Cap Funds come in.

What is a Flexi-Cap Fund?

A Flexi-Cap Fund is an equity mutual fund that can invest across all market capitalizations, large-cap, mid-cap, and small-cap, in any proportion. The fund manager has complete freedom to adjust the allocation based on market conditions. The benchmarks for these funds are the BSE 500 TRI and Nifty 500 TRI.

Key Features

• Dynamic allocation across large, mid, and small caps

• No fixed percentage requirement for each segment

• Actively managed based on market opportunities

• Must invest at least 65% in equity (SEBI guideline)

• Suitable for investors who want balanced growth without restricting their portfolio to one category

Methodology

1. Data Collection from AMFI: We began by downloading the list of Flexi Cap Funds from the official Association of Mutual Funds in India (AMFI) website to ensure accuracy and standardization.

   
   

2. Historical Return Extraction: For each Flexi Cap fund, we collected performance data across multiple time horizons, including 3-year, 5-year, and 10-year returns, as well as returns since launch. This helped in understanding both short-term and long-term performance trends.

3-Year Performance Comparison of Flexi Cap Funds vs Benchmark

1. Three-Year Benchmark Returns (NIFTY 500 & BSE 500)

Over the last three years, the benchmark indices NIFTY 500 and BSE 500 have delivered stable returns in the range of 16.1%–16.5%, which serves as the performance baseline for evaluating Flexi Cap funds.

NIFTY 500 – 16.46%

BSE 500 – 16.14%

2. Outperformance vs Underperformance

Among the 24 Flexi Cap funds analyzed, 17 funds outperformed the benchmark while 7 funds underperformed. This means that nearly 71% of the Flexi Cap category generated returns higher than the benchmark indices, indicating strong active management within the category.

3. Top & Weak performers

These delivered exceptionally higher returns than the benchmark (~16%):

• Bank of India Flexi Cap Fund – 23.41%

• Motilal Oswal Flexi Cap Fund – 23.20%

• JM Flexi Cap Fund – 22.69%

• HDFC Flexi Cap Fund – 22.37%

• Parag Parikh Flexi Cap Fund – 21.75%

• Edelweiss Flexi Cap Fund – 20.40%

These funds generated excess returns of 6–8%, which is significant for a 3-year period.

Weak Performers (Significantly Below Benchmark)

• Shriram Flexi Cap Fund – 13.00% (Gap of –3.46%)

• UTI Flexi Cap Fund – 11.83% (Gap of –4.63%)These are notable underperformers.

5-Year Performance Comparison of Flexi Cap Funds vs Benchmark

1. Benchmark Returns (NIFTY 500 / BSE 500 – 5 Year)

Over the last five years, the benchmark indices NIFTY 500 and BSE 500 have delivered returns in the range of 19.05%–19.08%. This serves as the reference point for evaluating the long-term performance of Flexi-Cap funds.

2. Outperformance vs Underperformance

Among the 24 Flexi Cap funds analyzed, 13 funds outperformed the benchmark, while 11 funds underperformed the benchmark. This means that nearly 54% of the Flexi Cap category generated returns higher than the benchmark indices, indicating strong active management within the category.

3. Top & Weak performers

These delivered exceptionally higher returns than the benchmark (~19%):

• Quant Flexi Cap Fund - 27.41%

• HDFC Flexi Cap Fund - 27.19%

• Bank of India Flexi Cap Fund  – 25.26%

• JM Flexi Cap Fund -  24.36%

• Franklin India Flexi Cap Fund – 22.56%

  
  

Weak Performers (Significantly Below Benchmark)

• UTI Flexi Cap Fund– 13.82%

• Shriram Flexi Cap Fund– 14.86%

• Axis Flexi Cap Fund– 15.85%

• Taurus Flexi Cap Fund– 15.96%

• LIC MF Flexi Cap Fund– 16.06%

10-Year Performance Comparison of Flexi Cap Funds vs Benchmark

1. Benchmark Returns (NIFTY 500 / BSE 500 – 10 Year)

Over the last ten years, the benchmark indices NIFTY 500 and BSE 500 have delivered returns in the range of 15.05%–15.11%, and this serves as the baseline to evaluate long-term Flexi Cap fund performance.

2. Outperformance vs Underperformance (10-Year)

Based on the comparison of 10-year Direct Plan CAGR with the benchmark:

Outperformed the Benchmark: 12 funds

Underperformed the Benchmark: 7 funds

3. Top & Weak performers

These delivered exceptionally higher returns than the benchmark (~15%):

• Quant Flexi Cap Fund – 20.38%

• Parag Parikh Flexi Cap Fund – 18.56%

• JM Flexi Cap Fund – 18.54%

• HDFC Flexi Cap Fund – 17.44%

  
  

Weak 4 Performers (Lowest 10-Year Returns)

These funds delivered the lowest actual 10-year CAGR:

• Taurus Flexi Cap Fund – 10.61%

• LIC MF Flexi Cap Fund – 11.62%

• Bandhan Flexi Cap Fund – 12.73%

Performance Comparison of Flexi Cap Funds vs Benchmark Since lunch

1. Benchmark Returns (Since Launch)

Across all Flexi Cap schemes, the benchmark (NIFTY 500 TRI / BSE 500 TRI) return since launch ranges approximately between 13.01% and 22.51%, depending on each fund’s launch year. This acts as the base for evaluating long-term performance since inception.

2. Outperformance vs Underperformance (Since Launch)

Based on “Return Since Launch – Direct” vs benchmark:

Outperformed the Benchmark: 18 funds

Underperformed the Benchmark: 6 funds

This indicates that 75% of Flexi Cap funds have delivered superior returns over their benchmarks since launch.

3. Top & Weak performers (Highest & Lowest Return Since Launch – With Benchmark)

• Bank of India Flexi Cap Fund – 28.77% vs Benchmark 22.51%

• Parag Parikh Flexi Cap Fund – 19.70% vs Benchmark 15.24%

• Quant Flexi Cap Fund – 19.07% vs Benchmark 14.51%

• JM Flexi Cap Fund – 17.68% vs Benchmark 14.57%

  
  

Weak Performers (Lowest Return Since Launch – With Benchmark)

• Taurus Flexi Cap Fund – 10.77% vs Benchmark 14.57%

• LIC MF Flexi Cap Fund – 11.76% vs Benchmark 14.52%

• Shriram Flexi Cap Fund – 12.78% vs Benchmark 15.69%

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Conclusion

Flexi Cap Funds stand out as one of the most versatile equity investment options because of their ability to dynamically allocate across large-cap, mid-cap, and small-cap segments. This flexibility enables fund managers to shift between stability and growth, depending on market conditions, ensuring the portfolio is optimally positioned at different phases of the economic cycle. As a result, Flexi Cap Funds often deliver superior risk-adjusted returns, making them suitable for investors seeking a balanced approach—neither too conservative nor overly aggressive. Their broad diversification, dynamic asset allocation, and professional management make them an attractive long-term wealth creation vehicle.

Across the 3-year, 5-year, 10-year, and since-launch analyses, a few schemes have consistently stood out for their strong performance. The Bank of India Flexi Cap Fund, Parag Parikh Flexi Cap Fund, Quant Flexi Cap Fund, and JM Flexi Cap Fund emerged as some of the top performers, consistently outperforming their respective benchmarks across multiple time horizons. These funds demonstrated strong stock selection, disciplined strategy, and efficient allocation, resulting in substantial long-term alpha.

On the other hand, a few funds consistently trailed their benchmarks and category averages. Shriram Flexi Cap Fund, Taurus Flexi Cap Fund, and UTI Flexi Cap Fund were among the weakest performers, delivering significantly lower returns compared to both their peers and their benchmarks. This underperformance underscores the importance of active fund selection and periodic review when investing in actively managed categories, such as Flexi Cap Funds.

Overall, the analysis reinforces that while Flexi Cap Funds offer excellent potential, choosing the right fund is crucial for maximizing long-term returns.