Multi-cap vs flexi-cap: The popularity of equity mutual funds among Indian investors is increasing rapidly. In such a situation, multi-CAP and Flexi-Cap funds have emerged as two important options. Investors have invested a lot of money during the last three months in both the schemes.
According to the May 2025 data from the Association of Mutual Funds in India (AMFI), ₹ 2,999.29 crore was recorded in multi-cap funds and ₹ 3,841.32 crore in Flexi-Cap Funds.
Let us understand what is the difference between multi-cap and flexi-cap and which fund will be better according to your investment strategy.
Multi-Cap vs Flexi-Cap: What is the difference
According to Navy Vijay Ramavat, managing director at INDIRA Group, multi-cap funds run under a regulatory framework. It requires 25% -25% investment in large cap, mid cap and small cap as per SEBI instructions.
This of course ensures diversification, but the decision capacity of the fund manager is limited. This strategy can sometimes increase the risk in market fluctuations.
In comparison, flexi-cap funds give more flexibility. In these, the fund manager does not have the bond of investment in a particular category, provided at least 65% of the total portfolio has been invested in equity. This means that according to the market situation, the manager can change his stance in large, mid or small cap at any time.
Will Flexi-Cap give better returns?
Navi Vijay Ramawat, managing director of Indira Group, believes that Flexi-Cap funds offer better benefits of occasions. According to him, “The market cap has more important sector moves. Flexibility makes investment more effective. Even cash positions can be strategic.”
According to Finkeda Chairman and MD Manish Kumar Goyal, “Multi-cap funds are suitable for investors who want a balanced and rules. At the same time, flexi-cap funds are better for investors who want a change in allocation according to market trends.”
Multi-Cap vs Flexi-Cap: In which investing in which?
| Scheme | strategy | Specialty |
| Multi-cap | Rules based |
25% compulsory investment in all caps |
| Flexi-cap | Market based |
Free movement freedom in any cap |
It is important for investors to understand that both these schemes should be selected on the basis of their financial targets and risk profiles. While multi-cap gives stability and balance, flexi-cap gives flexibility to take advantage of opportunities. In such a situation, you should choose the fund according to your priority and convenience.
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