Flexi-Cap Funds Deliver 59% Returns in 1 Year: Should You Invest Despite the Risks?

Many people have turned to the stock market to earn better returns than fixed deposits. However, if you have limited knowledge of the stock market, you can invest in mutual funds. By investing in flexi-cap mutual funds, you can earn good profits. This category has provided returns of up to 59% in the last year. Today, we are informing you about flexi-cap funds.

What is a Flexi-Cap Fund?

A flexi-cap fund is an equity mutual fund that offers investment flexibility. In this, the fund manager invests the investor’s money in small, mid, or large caps according to their preference. The fund manager is not bound to allocate a specific percentage to any particular fund category.

Who Should Invest in This Scheme?

If you want to invest in equity funds but do not want high-risk exposure, you can invest in top-rated flexi-cap funds. These funds are well-diversified according to market capitalization. While these funds may provide lower returns than small and mid-cap funds when the market is stable, they are less risky in volatile market conditions. Therefore, if you are looking for a lower-risk fund, you can consider investing in flexi-cap funds.

Investing for the Long Term is Beneficial

Pankaj Mathpal, a personal finance expert and founder & CEO of Optima Money Managers, suggests investing in these schemes with at least a 5-year time horizon. These categories may not perform well in the short term, but over the long term, they can provide better returns.

Investing Through SIP is More Beneficial

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