A ₹10,000 monthly SIP in HDFC Flexi Cap Fund for 10 years grew to ₹34 lakh.
The same SIP in a bottom-performing flexi cap fund? Just ₹24 lakh. That's a ₹10 lakh difference from choosing the right fund.
At Belong, we talk to NRIs daily who want the flexibility of investing across market caps without constantly switching funds. Flexi caps solve that problem. One fund, one decision, access to large caps, mid caps, and small caps based on where opportunities exist.
But with 39+ flexi cap funds in the market, how do you choose? This guide ranks funds using transparent criteria you can verify.
We separate rankings by 5-year returns, by AUM, and by expense ratio. No hidden agendas, just data that helps you make a confident decision.
What Makes Flexi Cap Funds Different
Flexi cap funds invest across all market capitalizations without fixed allocation limits. SEBI introduced this category on November 8, 2020, giving fund managers complete freedom to move between large, mid, and small caps based on market conditions.
The key difference from other categories:
Category | Large Cap | Mid Cap | Small Cap |
|---|---|---|---|
Large Cap Fund | Min 80% | Max 20% | Max 20% |
Mid Cap Fund | Max 35% | Min 65% | Max 35% |
Multi Cap Fund | Min 25% | Min 25% | Min 25% |
Flexi Cap Fund | No limit | No limit | No limit |
Multi cap funds must maintain 25% minimum in each segment. Flexi caps have no such constraint. If the fund manager sees better opportunities in large caps during a correction, they can shift 70-80% there. When small caps rally, they can increase allocation.
This flexibility is powerful in the hands of skilled fund managers. It's also risky if the manager makes poor timing decisions.
👉 Tip: Flexi cap funds work best when you trust the fund manager's ability to navigate market cycles. Don't choose based on past returns alone.
Why NRIs Prefer Flexi Cap Funds
Flexi caps have become the default equity allocation choice for many NRIs in the UAE. Here's why:
One fund covers all bases. Instead of managing separate large cap, mid cap, and small cap funds, you get diversified exposure in a single investment. Less paperwork, fewer tracking headaches.
Professional rebalancing. Fund managers shift allocations based on valuations and market cycles. You don't need to decide when to move from large caps to small caps.
Lower monitoring requirement. Perfect for busy NRIs who can't track Indian markets daily. Set up a SIP and let the fund manager handle the rest.
Proven track record. According to AMFI data, flexi cap funds have delivered 18-27% average returns over 5 years, with top performers crossing 25%.
The Nifty 500 TRI, the typical benchmark for flexi caps, represents the broader market. Flexi caps that consistently beat this benchmark demonstrate genuine fund manager skill.
Best Flexi Cap Funds Ranked by 5-Year Returns
This ranking focuses purely on trailing 5-year CAGR. Higher returns appear first.
Ranking Criteria: 5-year annualized returns as of December 2025. Data sourced from INDmoney, Value Research, and Tickertape.
Rank | Fund Name | 5Y CAGR | 3Y CAGR | 1Y Return | Expense Ratio |
|---|---|---|---|---|---|
1 | Quant Flexi Cap Fund | 31.9% | 14.8% | -8.1% | 0.68% |
2 | Franklin India Flexi Cap | 25.2% | 19.8% | -0.6% | 0.90% |
3 | HDFC Flexi Cap Fund | 24.8% | 21.6% | 8.7% | 0.67% |
4 | JM Flexicap Fund | 21.3% | 21.1% | -7.7% | 0.55% |
5 | Parag Parikh Flexi Cap | 21.0% | 21.9% | 7.4% | 0.63% |
6 | Edelweiss Flexi Cap Fund | 20.4% | 20.2% | 3.5% | 0.48% |
7 | Kotak Flexi Cap Fund | 17.7% | 17.8% | 10.1% | 0.58% |
8 | SBI Flexi Cap Fund | 16.8% | 15.2% | 5.2% | 0.72% |
9 | UTI Flexi Cap Fund | 15.5% | 14.9% | 4.8% | 0.82% |
10 | Aditya Birla SL Flexi Cap | 15.2% | 14.7% | 6.3% | 0.74% |
Data as of December 2025. Source: INDmoney, Value Research, Tickertape
Quant Flexi Cap Fund: The Aggressive Leader
The highest 5-year returns at 31.9%, but look at that 1-year return: -8.1%. This tells you everything about Quant's style.
Quant Mutual Fund follows their VLRT framework: Valuation, Liquidity, Risk, and Time. It's a data-driven, quantitative approach that swings aggressively between sectors and market caps. When it works, returns are spectacular. When it doesn't, drawdowns are steep.
Top holdings include: Adani Enterprises (6.7%), Samvardhana Motherson (6.4%), and significant exposure to services, healthcare, and energy sectors.
Why it stands out: Highest alpha generation among flexi caps. Consistently top-quartile over 3, 5, and 7-year periods.
The catch: Very high volatility. Not suitable for conservative investors or those who panic during corrections.
AUM: ₹6,272 crore Minimum SIP: ₹250
HDFC Flexi Cap Fund: The Balanced Performer
India's oldest flexi cap fund, launched in 1995, now managing ₹94,069 crore. That's nearly ₹1 lakh crore in investor trust built over three decades.
Fund manager Chirag Setalvad maintains a banking-heavy portfolio: ICICI Bank (9.5%), HDFC Bank (8.8%), and Axis Bank (7.4%). Sector allocation leans toward banking (35.2%), automobiles (13.8%), and healthcare (8.2%).
Rolling 5-year CAGR of 28.17% according to Equitymaster, demonstrating consistent performance across market cycles.
Why it stands out: Highest alpha ratio in category at 7.27. Domestic-focused strategy with proven track record. Lower volatility than aggressive peers.
AUM: ₹94,069 crore Expense Ratio: 0.67% Minimum SIP: ₹100
👉 Tip: HDFC Flexi Cap has consistently outperformed its Nifty 500 benchmark over 1, 3, and 5 year periods according to INDmoney rankings.
Parag Parikh Flexi Cap Fund: The Global Diversifier
The largest flexi cap fund by AUM at ₹1,29,783 crore. What makes it different? International exposure.
While most flexi caps invest only in Indian stocks, Parag Parikh allocates a portion to US giants like Alphabet (Google). This global diversification reduces India-specific risk and provides exposure to companies not available on Indian exchanges.
Asset allocation: Stocks 78.4%, Debt 20.7%, Gold 0.9%. That debt allocation provides stability during equity corrections.
Top holdings: HDFC Bank (8%), Power Grid Corporation (6%), Bajaj Holdings (5.2%), ITC (4.6%), ICICI Bank (4.6%).
PE Ratio: 18.61 versus category average of 28.81. This lower PE suggests the fund focuses on value investing rather than chasing expensive growth stocks.
Why it stands out: Lowest standard deviation (8.70) among top flexi caps, meaning lowest volatility. Global diversification. Strong risk-adjusted returns.
The catch: Higher exit load (2% within 365 days, 1% between 365-730 days) compared to peers.
Fund Managers: Rajeev Thakkar (since 2013), Raj Mehta, Raunak Onkar Minimum SIP: ₹1,000
JM Flexicap Fund: The Risk-Adjusted Champion
Don't let the smaller AUM (₹6,015 crore) fool you. JM Flexicap has the highest Sharpe Ratio (1.18) in the category, meaning best risk-adjusted returns.
What does this mean practically? For every unit of risk taken, JM generates higher returns than peers. Smart investing isn't just about returns; it's about returns relative to risk taken.
Top sectors: Consumer goods, IT, pharmaceuticals with a well-diversified approach across 50+ stocks.
Why it stands out: Superior risk-adjusted performance. Reasonable expense ratio at 0.55%. Strong 3-year and 5-year track record.
The catch: Relatively small AUM may limit capacity for large investors. Recent 1-year returns are negative (-7.7%).
Expense Ratio: 0.55% (among lowest in category) Exit Load: 1% within 30 days
Best Flexi Cap Funds Ranked by AUM
Assets Under Management reflects cumulative investor trust. Higher AUM typically means longer track records and institutional credibility.
Ranking Criteria: Total AUM as of December 2025. Data from AMFI and fund factsheets.
Rank | Fund Name | AUM (₹ Cr) | 5Y CAGR | Expense Ratio |
|---|---|---|---|---|
1 | Parag Parikh Flexi Cap | 1,29,783 | 21.0% | 0.63% |
2 | HDFC Flexi Cap Fund | 94,069 | 24.8% | 0.67% |
3 | Kotak Flexi Cap Fund | 56,885 | 17.7% | 0.58% |
4 | UTI Flexi Cap Fund | 28,500 | 15.5% | 0.82% |
5 | SBI Flexi Cap Fund | 24,200 | 16.8% | 0.72% |
6 | Franklin India Flexi Cap | 18,727 | 25.2% | 0.90% |
7 | ICICI Prudential Flexi Cap | 15,800 | 18.5% | 0.78% |
8 | Aditya Birla SL Flexi Cap | 14,500 | 15.2% | 0.74% |
9 | DSP Flexi Cap Fund | 12,200 | 16.9% | 0.68% |
10 | Nippon India Flexi Cap | 8,900 | 17.2% | 0.72% |
Data as of December 2025. Source: AMFI, fund factsheets
Parag Parikh: The AUM Giant
Parag Parikh received ₹3,140 crore in net inflows in just one month recently, according to INDmoney. That's more than many funds receive in a year.
Why do investors trust it so much?
Consistent philosophy: Value-focused investing with global diversification hasn't changed since 2013. Fund manager Rajeev Thakkar has managed it from inception.
Lower PE: At 18.61 versus category average 28.81, the fund buys companies at more reasonable valuations.
Debt cushion: 20%+ in debt provides stability during equity corrections.
Kotak Flexi Cap: The Conservative Choice
With ₹56,885 crore AUM, Kotak attracts investors who want flexi cap exposure without extreme volatility.
Returns are moderate: 17.7% over 5 years is below category average. But Kotak has the lowest beta (0.93) among major flexi caps, meaning it moves less than the market during both rallies and corrections.
10-year SIP performance: ₹10,000/month grew to ₹27.4 lakh according to Upstox analysis, demonstrating steady long-term compounding.
Best for: Conservative investors who prioritize capital preservation alongside growth.
Best Flexi Cap Funds Ranked by Expense Ratio
Lower expenses directly boost returns. Over 20 years, a 0.30% expense difference compounds to significant amounts.
Ranking Criteria: Direct plan expense ratio (lowest to highest).
Rank | Fund Name | Expense Ratio | 5Y CAGR | AUM (₹ Cr) |
|---|---|---|---|---|
1 | Edelweiss Flexi Cap Fund | 0.48% | 20.4% | 5,200 |
2 | JM Flexicap Fund | 0.55% | 21.3% | 6,015 |
3 | Kotak Flexi Cap Fund | 0.58% | 17.7% | 56,885 |
4 | Parag Parikh Flexi Cap | 0.63% | 21.0% | 1,29,783 |
5 | HDFC Flexi Cap Fund | 0.67% | 24.8% | 94,069 |
6 | Quant Flexi Cap Fund | 0.68% | 31.9% | 6,272 |
7 | DSP Flexi Cap Fund | 0.68% | 16.9% | 12,200 |
8 | SBI Flexi Cap Fund | 0.72% | 16.8% | 24,200 |
9 | Aditya Birla SL Flexi Cap | 0.74% | 15.2% | 14,500 |
10 | Franklin India Flexi Cap | 0.90% | 25.2% | 18,727 |
Data as of December 2025. Source: Fund factsheets
The Cost Efficiency Winners
Edelweiss Flexi Cap (0.48%) delivers 20.4% returns at the lowest cost in category. On a ₹50 lakh portfolio over 20 years, this expense advantage compounds to lakhs of rupees saved.
JM Flexicap (0.55%) combines low costs with superior risk-adjusted returns (highest Sharpe ratio). Strong value proposition for cost-conscious investors.
Why this matters: The difference between 0.48% and 0.90% seems small, but over 20 years on a ₹1 crore portfolio, you save approximately ₹12-15 lakh in fees.
👉 Tip: Always choose Direct plans over Regular plans. The expense difference (0.5-1% annually) is pure savings that compounds significantly over time.
How Top Flexi Caps Allocate Across Market Caps
Understanding allocation patterns helps you choose the right fund for your risk profile.
Fund Name | Large Cap | Mid Cap | Small Cap | Others |
|---|---|---|---|---|
Parag Parikh | 55-65% | 10-15% | 5-10% | 15-20% (US stocks, debt) |
HDFC Flexi Cap | 60-70% | 20-25% | 5-10% | Cash |
Kotak Flexi Cap | 65-75% | 15-20% | 5-10% | Cash |
JM Flexicap | 40-50% | 25-35% | 15-25% | Cash |
Quant Flexi Cap | 35-45% | 30-35% | 20-25% | Cash |
Key insight: Parag Parikh, HDFC, and Kotak maintain large cap bias, providing stability. JM and Quant take more mid/small cap exposure, driving higher returns but also higher volatility.
If you want aggressive growth, Quant or JM may suit you. For stability with reasonable growth, Parag Parikh or Kotak work better.
Sector Allocation: Where Flexi Cap Funds Invest
Understanding sector exposure helps avoid overconcentration across your portfolio.
Sector | Average Allocation | Top Funds Overweight |
|---|---|---|
Banking/Financials | 25-35% | HDFC (35.2%), Franklin (28%) |
IT/Technology | 8-15% | Parag Parikh (9.9%), JM (12%) |
Consumer | 10-15% | Kotak, Edelweiss |
Automobiles | 8-14% | HDFC (13.8%), Quant |
Healthcare | 6-10% | HDFC (8.2%), JM |
Industrials | 8-12% | Franklin, JM |
Most flexi cap funds are overweight on banking and financials. If you already own banking stocks or BFSI-focused funds, check for overlap before adding flexi cap exposure.
Parag Parikh's allocation to US tech stocks (Alphabet, etc.) provides unique diversification not available in other flexi caps.
10-Year SIP Performance: Real Wealth Creation Data
What would ₹10,000/month invested 10 years ago be worth today? Upstox research provides the answer:
Fund Name | 10Y Annualized | ₹10,000 SIP Value |
|---|---|---|
HDFC Flexi Cap | 18.8% | ₹33-34 lakh |
Franklin India Flexi Cap | 14.7% | ₹27.3 lakh |
Kotak Flexi Cap | 14.7% | ₹27.4 lakh |
Aditya Birla SL Flexi Cap | 14.7% | ₹27 lakh |
SBI Flexi Cap | 13.4% | ₹25.3 lakh |
UTI Flexi Cap | 12.8% | ₹24 lakh |
Total invested: ₹12 lakh (₹10,000 × 12 months × 10 years)
The difference between HDFC (₹34 lakh) and UTI (₹24 lakh) is ₹10 lakh on the same investment. Fund selection matters enormously over long periods.
Flexi Cap vs Multi Cap: Which Should NRIs Choose?
This is a common confusion. Here's the clear difference:
Parameter | Flexi Cap | Multi Cap |
|---|---|---|
Large Cap Allocation | No minimum | Minimum 25% |
Mid Cap Allocation | No minimum | Minimum 25% |
Small Cap Allocation | No minimum | Minimum 25% |
Fund Manager Freedom | Complete | Constrained |
Typical Volatility | Moderate | Higher |
Choose Flexi Cap if: You want to give the fund manager complete freedom to navigate markets. Best when you trust the manager's judgment.
Choose Multi Cap if: You want guaranteed exposure across all market caps regardless of conditions. More mechanical diversification.
Most experienced investors prefer flexi caps for the flexibility. Multi caps were actually created from flexi caps when SEBI mandated the 25% allocation rule, and funds that wanted to keep flexibility moved to the new "flexi cap" category.
How Flexi Caps Behave in Different Markets
Understanding market cycle behavior helps set realistic expectations.
Bull Markets (2020-2021, Early 2024)
Flexi caps with higher mid/small cap allocation (Quant, JM) outperform. HDFC Flexi Cap's 28.17% rolling 5-year CAGR according to Equitymaster was achieved during periods that included strong bull runs.
Funds can shift allocation toward aggressive segments during rallies, amplifying returns.
Corrections (2022, Late 2024)
Large cap-biased flexi caps (Parag Parikh, Kotak) fall less. Parag Parikh's debt allocation (20%+) provides additional cushion.
In the 2022 correction, Quant Flexi Cap dropped significantly more than Kotak, reflecting their different risk profiles.
Sideways Markets
Active flexi caps can add value by finding pockets of opportunity across segments. This is where fund manager skill matters most.
Taxation for NRIs on Flexi Cap Funds
Tax rules changed after July 23, 2024. Here's the updated structure:
Capital Gains Tax
Holding Period | Tax Rate | Notes |
|---|---|---|
Less than 12 months (STCG) | 20% | Increased from 15% in July 2024 |
More than 12 months (LTCG) | 12.5% on gains above ₹1.25L | Increased from 10% above ₹1L |
TDS Deduction
Banks and AMCs deduct TDS on redemptions:
- STCG: 20% TDS
- LTCG: 12.5% TDS on gains exceeding ₹1.25 lakh
You can claim refunds by filing ITR if TDS exceeds actual liability.
Tax Optimization Strategies
Harvest gains strategically. Redeem up to ₹1.25 lakh in gains each financial year tax-free. Split larger redemptions across two financial years (March and April) to use exemptions twice.
Hold for minimum 12 months. The difference between 20% STCG and 12.5% LTCG is significant. On ₹5 lakh gains, that's ₹37,500 saved.
Consider DTAA benefits. UAE doesn't tax capital gains. Proper documentation may provide relief under the Double Taxation Avoidance Agreement.
For detailed tax guidance, use our NRI tax filing service.
A Smarter Alternative: GIFT City Funds
Here's what most NRIs don't consider: GIFT City mutual funds offer potentially tax-free returns for UAE residents.
Under Section 10(4D) of the Income Tax Act, capital gains from GIFT City funds are exempt from Indian tax. Combined with UAE's zero-tax environment, you effectively pay 0% on investment gains.
Regular vs GIFT City: A Comparison
Parameter | Regular Flexi Cap Fund | GIFT City Alternative |
|---|---|---|
STCG Tax | 20% | 0% (for UAE NRIs) |
LTCG Tax | 12.5% above ₹1.25L | 0% (for UAE NRIs) |
Currency | INR | USD |
TDS | Yes | No |
Rupee Risk | Fully exposed | Protected |
Repatriation | Via NRE/NRO | Fully repatriable |
The Tax Savings Math
Invest ₹50 lakh in a flexi cap fund earning 20% annually for 10 years:
- Regular fund: Corpus ₹3.1 crore, Tax on gains ~₹32L = Net ₹2.78 crore
- GIFT City: Corpus ₹3.1 crore, Tax = ₹0 = Net ₹3.1 crore
That's ₹32+ lakh saved purely through tax efficiency on a single investment.
Explore options through our GIFT City mutual funds explorer. Funds like DSP Global Equity Fund and Tata India Dynamic Equity Fund offer diversified exposure with tax advantages.
👉 Tip: Use Belong's Rupee vs Dollar tracker to understand why USD-denominated investments protect against rupee depreciation over time.
How to Select the Right Flexi Cap Fund
With 39+ options, choosing can feel overwhelming. Here's a framework:
Step 1: Assess Your Risk Tolerance
Risk Profile | Recommended Approach |
|---|---|
Conservative | Large cap-biased funds (Kotak, Parag Parikh) |
Moderate | Balanced allocation (HDFC, Franklin) |
Aggressive | Mid/small cap-heavy (Quant, JM) |
Cost-Focused | Low expense options (Edelweiss, JM) |
Step 2: Check Consistency, Not Just Returns
Don't just look at 5-year trailing returns. Evaluate:
Rolling returns: How has the fund performed across various 3-year periods? Sharpe Ratio: Returns per unit of risk. Higher is better. JM leads at 1.18. Alpha: Does the fund consistently generate returns above its benchmark?
Step 3: Evaluate Fund Manager Tenure
Flexi cap performance depends heavily on manager skill. Look for:
Rajeev Thakkar has managed Parag Parikh since 2013. Complete continuity. Chirag Setalvad has led HDFC Flexi Cap since 2007. Deep experience across multiple market cycles.
Frequent manager changes signal potential instability.
Step 4: Consider Portfolio Overlap
If you own large cap funds or banking sector funds, check if they hold the same stocks. HDFC Flexi Cap's 35% banking allocation may create excessive overlap.
Model Portfolios for Different Goals
Conservative NRI (Stability-Focused)
Allocation | Fund Type | Example |
|---|---|---|
40% | Flexi Cap (Large Cap Bias) | Parag Parikh Flexi Cap |
30% | ICICI Pru Balanced Advantage | |
20% | HDFC Short Term Debt | |
10% | Gold ETF/SGB |
Expected returns: 12-15% with low volatility
Growth-Oriented NRI (10+ Year Horizon)
Allocation | Fund Type | Example |
|---|---|---|
50% | Flexi Cap (Balanced) | HDFC Flexi Cap |
30% | HDFC Mid Cap Fund | |
15% | Nippon India Small Cap | |
5% | DSP Global Equity |
Expected returns: 18-22% with moderate volatility
Aggressive NRI (Maximum Growth, 15+ Year Horizon)
Allocation | Fund Type | Example |
|---|---|---|
40% | Flexi Cap (Aggressive) | Quant Flexi Cap |
30% | Quant Small Cap | |
20% | Motilal Oswal Midcap | |
10% | Infrastructure/Manufacturing |
Expected returns: 22-28% with high volatility
How to Invest in Flexi Cap Funds as an NRI
Step 1: Complete KYC
You'll need:
- PAN card
- Passport with valid visa
- Overseas address proof
- Passport-size photograph
Most AMCs offer video KYC for remote completion from the UAE.
Step 2: Link Your Bank Account
Open an NRE or NRO account with an Indian bank:
- NRE: Full repatriation of principal and gains
- NRO: ₹1 million annual repatriation limit
Compare options using our NRI FD rates tool to find banks with the best NRI services.
Step 3: Choose SIP or Lump Sum
SIP works better for most investors. Flexi caps experience moderate volatility, and SIP averages out your purchase price across market cycles.
However, if you have a lump sum (gratuity, bonus) and the market is in correction territory, deploying 50% immediately and the rest via STP (Systematic Transfer Plan) can work well.
Step 4: Select Direct Plans
Always choose Direct plans to avoid distributor commissions. This saves 0.5-1% annually.
Common Mistakes to Avoid
1. Chasing Last Year's Topper
Quant Flexi Cap gave 31.9% over 5 years but -8.1% in the last year. Flexi caps are cyclical. The fund that topped this year may underperform next year.
2. Ignoring Fund Manager Changes
Flexi cap performance depends heavily on manager skill. If your fund announces a manager change, evaluate whether to stay or switch.
3. Holding Multiple Flexi Caps
One well-chosen flexi cap is enough for most portfolios. Holding 3-4 flexi caps creates unnecessary overlap and doesn't improve diversification.
4. Expecting Consistent Returns
Flexi caps will have years of 30%+ returns and years of negative returns. Don't panic during down years. Stay invested for 7-10+ years minimum.
5. Ignoring Tax-Efficient Alternatives
UAE NRIs paying 12.5-20% tax on mutual fund gains unnecessarily. Explore GIFT City options for potentially tax-free returns.
When Should You Avoid Flexi Cap Funds?
Flexi caps aren't for everyone. Consider alternatives if:
You need funds within 5 years. Flexi caps can remain underwater for 2-3 years during corrections. Choose debt funds or conservative hybrid funds instead.
You want guaranteed market cap exposure. If you specifically want 25% each in large, mid, and small caps, choose multi cap funds instead.
You don't trust active management. If you believe index funds beat active managers, consider Nifty 500 index funds rather than flexi caps.
You're within 3 years of retirement. If you plan to return to India soon, reduce equity exposure gradually.
Take Your Next Step
Flexi cap funds offer the convenience of diversified equity exposure in a single investment. Whether you choose the stability of Parag Parikh, the consistent performance of HDFC, or the aggressive growth potential of Quant, the key is matching the fund's approach to your risk tolerance and time horizon.
Use Belong's NRI FD Comparison Tool to explore stable alternatives for the conservative portion of your portfolio. Check your residential status to understand tax implications correctly.
For tax-efficient equity exposure, explore GIFT City mutual funds that offer potentially zero tax on capital gains for UAE residents.
Have questions about which flexi cap fund fits your situation? Join our WhatsApp community where many NRIs discuss their investment strategies daily. Or download the Belong app to start investing in tax-efficient GIFT City products.
Disclaimer: Mutual fund investments are subject to market risks. Past performance does not guarantee future returns. Rankings in this article use transparent criteria (5-year returns, AUM, expense ratio) and should not be considered investment recommendations. Consult a SEBI-registered advisor before investing.
