Flexi-Cap Funds: 42% Returns in 1 Year – Are They Worth the Risk?

Many people invest in the stock market to earn higher returns compared to fixed deposits. However, if you have limited knowledge of the stock market, you can invest in mutual funds. By investing in Flexi-Cap Funds, you can achieve significant profits. This category has delivered returns of up to 42% in the past year. Today, we will explain everything you need to know about Flexi-Cap Funds.

What is a Flexi-Cap Fund?

A Flexi-Cap Fund is an equity mutual fund that offers flexibility in investments. In this fund, the fund manager invests the investor’s money across small-cap, mid-cap, or large-cap companies as per their discretion. The fund manager is not restricted to any particular category or proportion for investments.

Who Should Invest in Flexi-Cap Funds?

If you want to invest in equity funds but prefer avoiding high-risk exposure, you can opt for top-rated Flexi-Cap Funds. These funds are well-diversified across market capitalizations. While they may offer lower returns compared to small-cap and mid-cap funds during stable market conditions, they tend to be less risky during volatile market phases. Therefore, if you are looking for a lower-risk fund, Flexi-Cap Funds can be a suitable choice.

Long-Term Investment is Advisable

Pankaj Mathpal, a personal finance expert and the founder and CEO of Optima Money Managers, suggests investing in these schemes with a minimum horizon of 5 years. While these funds may not perform exceptionally well in the short term, they have the potential to deliver better returns over the long term.

SIP is a Better Investment Option

According to experts, instead of investing a lump sum amount in mutual funds, it is better to invest through a Systematic Investment Plan (SIP). SIP allows you to invest a fixed amount every month, which reduces risk as it is less affected by market fluctuations.