Flexi-cap mutual funds have become very popular in 2025 as they offer the flexibility to invest across large-cap, mid-cap, and small-cap stocks. This makes them suitable for different market conditions. As the Indian stock market has seen both ups and downs this year, many investors are looking at flexi-cap funds to balance risk and growth. These funds have shown strong inflows and are now among the top choices in equity mutual fund categories.
In the first half of 2025, flexi-cap funds attracted investments of about ₹15,000 crore. This shows the growing trust of investors in this category. The total assets managed by flexi-cap funds have touched around ₹4.71 lakh crore, making it the second-largest category after large-cap funds. Many experts believe that flexi-cap funds are a smart choice because they give fund managers the freedom to shift between different market capitalisations depending on where the best opportunities are.
Flexi-cap funds have delivered strong returns over the years. On average, they have given about 13% annual returns over 3 years, around 16% over 5 years, and nearly 12% over 10 years. These numbers are better than many other equity fund categories.
This fund has become the largest flexi-cap fund in India with assets of over ₹1 lakh crore. It is well-known for its consistent performance. Over the past 3 years, it has delivered a compound annual growth rate (CAGR) of about 24.5%. Its 5-year CAGR is about 25.3%. Since its launch in 2013, the fund has given annual returns of about 19%.
Recently, this fund has added stocks like Bharti Airtel and Nesco to its portfolio. This shows the fund manager's strategy of picking strong value stocks that could benefit as the economy recovers.
HDFC Flexi Cap Fund is one of the oldest and most trusted flexi-cap funds in India. It manages assets of around ₹75,800 crore. The fund has shown impressive performance, with 3-year annualised returns of nearly 27.8% and 5-year returns of around 28.9%. Since its launch in 1995, it has given annualised returns of about 19%.
The fund is known for its ability to perform well in different market cycles. This makes it a preferred choice for many long-term investors.
This fund is appreciated for its disciplined investment style. It has delivered around 25% annual returns over the past 3 years and about 26.5% over 5 years. The fund has an expense ratio of about 0.79%, which is reasonable compared to other funds in the same category.
The fund manager focuses on selecting quality companies and holding them for the long term. This strategy has helped the fund create wealth for investors over the last decade.
Motilal Oswal Flexi Cap Fund manages around ₹13,000 crore and has become a top performer in recent years. It has given around 33.4% annualised returns over 3 years and about 28.9% over 5 years.
The fund follows a high-growth strategy, focusing on companies that have the potential to grow faster than the market. However, this can also lead to higher risk, so it is more suited for investors looking for growth and who can handle market ups and downs.
UTI Flexi Cap Fund is a good choice for those who prefer a stable and long-established fund. It was launched in 2005 and has a steady track record. The fund has delivered about 15.3% annual returns over the past 3 years. Although its recent performance is moderate compared to others, it remains a reliable option for investors seeking stability with moderate risk.
| Fund Name | 3-Year Annual Return |
| Motilal Oswal Flexi Cap | 33.4% |
| HDFC Flexi Cap | 27.8% |
| Edelweiss Flexi Cap | 25.1% |
| Parag Parikh Flexi Cap | 24.5% |
| UTI Flexi Cap | 15.3% |
Other good options include HSBC Flexi Cap, PGIM India Flexi Cap, SBI Flexi Cap, and Canara Robeco Flexi Cap. These funds have also shown strong 3 to 5-year returns.
Dynamic Investment Approach: Fund managers can shift between large-cap, mid-cap, and small-cap stocks as per market conditions. This flexibility helps in capturing growth across sectors.
Good for Uncertain Markets: In 2025, markets have been unpredictable due to global economic concerns and domestic factors. Flexi-cap funds can adjust their investments and manage risks better.
Tax Benefits: Like other equity funds, flexi-cap funds enjoy tax advantages. Long-term capital gains up to ₹1 lakh are tax-free, making them tax-efficient.
No Need to Choose Market Cap: Since the fund manager decides the mix of large, mid, and small-cap stocks, investors do not have to worry about selecting the right market cap category.
Volatility: Flexi-cap funds may have higher exposure to mid-cap and small-cap stocks, which can lead to greater ups and downs in the fund's value.
Expense Ratio: Some funds may have higher expense ratios (between 0.6% to 1.3%), which could reduce net returns over time.
Performance Consistency: It is important to check the fund's rolling returns and how consistently it has delivered compared to peers.
Many fund managers are focusing on mid-cap private banks, consumer discretionary sectors, and selected value stocks. For example, some funds are increasing exposure to mid-cap private banks as they believe these banks have attractive growth potential with lower risks compared to smaller lenders.
Some funds are also adding value stocks from sectors like telecom, infrastructure, and manufacturing as these areas are expected to benefit from government spending and reforms.
Flexi-cap funds are a smart option for investors in 2025 because they combine flexibility, growth potential, and professional management. The top funds like Parag Parikh Flexi Cap, HDFC Flexi Cap, Edelweiss Flexi Cap, Motilal Oswal Flexi Cap, and UTI Flexi Cap offer a mix of stability and performance. However, it is important to match the fund choice with individual risk tolerance, return expectations, and investment horizon.
Careful review of fund performance, portfolio structure, and expense ratios will help in selecting the right flexi-cap fund for long-term wealth creation.