The demand for passive mutual funds has grown exponentially over the past few years and the assets under management in this segment has grown to Rs 10.2 lakh crore or 17 percent of the total market share.
If one wants to maintain a bare minimum exposure to all market-cap segments via just one fund, then multicap funds are suited due to their minimum 25-25-25 rule. On the other hand, if one wants to bet on a fund manager’s ability to decide allocation to different market-cap segments, then flexicap funds are a better choice.
Equity mutual fund schemes that had relatively higher exposures to select PSU, finance, power, construction, defence, and automobiles stocks delivered better returns in FY24
Investors are pouring money into mid-and small-cap funds reflecting an increase in risk appetite among retail investors
For conservative investors who look for a small allocation to equity, investing in largecap funds is the way to go, while for aggressive investors, flexicap funds can be the choice.
Assets under management in flexi cap equity category hit its peak with total assets amounting to Rs 2.46 trillion during the quarter ended December 2022.
Fund managers can now simply reclassify their old multi-cap fund as a Flexi cap fund without realigning their portfolio