Understanding Flexicap and Multicap Mutual Funds: Top Performers Over Last 5 Years
When investing in mutual funds many people look at how well funds have done in past. While it’s important to also consider other factors like the quality of the fund’s management, fees and risk past performance often gets the most attention. This article will help you understand Flexicap and Multicap mutual funds. It will highlight some of the best-performing funds in these categories over the last five years.
What are Flexicap Mutual Funds?
Flexicap mutual funds are popular due to their flexible investment approach. According to a rule from the Securities and Exchange Board of India, flexicap funds are supposed to invest a minimum of 65% of money in equities and equity-related instruments. There is no restriction on any large, medium or small companies for the fund. They can freely back any company they want to, owing to the opportunities that a particular market provides.
As of June 30, 2024, according to the Association of Mutual Funds in India, there were 39 Flexicap funds with a collective corpus of Rs.4.01 lakh crore. Several investors are attracted by these funds. They have the promise of high returns while diversifying the risk across various kinds of companies.
Best Flexicap Mutual Funds
Here are some Flexicap funds that have given good returns over the past five years if you are looking for high returns:
- Franklin India Flexicap Fund: Returns 24%
- HDFC Flexicap Fund: Returns 24.02%
- JM Flexicap Fund: Returns 27.72%
- Parag Parikh Flexicap Fund: Returns 25.96%
- Edelweiss Flexicap Fund: Returns 22.12%
- PGIM India Flexicap Fund: Returns 22.43%
These funds have given more than 22% annual returns in the last five years. JM Flexicap Fund leads the group with a 27.72% return.
What are Multicap Mutual Funds?
Much like Flexicap funds, Multicap mutual funds invest in companies of all sizes. However, as per the SEBI guidelines that came out in October 2017, these funds are mandated to have at least 75% of the money invested in stocks and related assets. This way, it would balance the stability of large companies with the growth potential of medium and small companies.
As of June 30, 2024, AMFI reports 25 Multicap funds managing a total of Rs.1.54 lakh crore. These funds are popular as they can do well in various market conditions. They offer a diversified investment.
Top Multicap Mutual Funds
Here are some Multicap funds that have done well over the last five years:
- Mahindra Manulife Multicap Fund: 27.55% returns
- Invesco India Multicap Fund: 23.71% returns
- Baroda BNP Paribas Multicap Fund: 23.84% returns
- Nippon India Multicap Fund: 26.60% returns
- ICICI Prudential Multicap Fund: 23.20% returns
- Sundaram Multicap Fund: 21.67% returns
These funds have generated over 21% annual returns in the last five years with Mahindra Manulife Multicap Fund leading the way with a 27.55% return.
Conclusion
While looking at past returns is helpful. It’s important to remember that they don’t guarantee future performance. Changes in the market, economy or fund management can leave their mark on a fund’s future performance. That is, it is important to consider other key factors including the experience of the fund manager, the investment strategy of the fund and fees before investing.
You diversify your investment across all categories of funds to minimize risk. Build a balanced portfolio. Through Flexicap and Multicap mutual funds, one gets a chance to diversify the risk in equity and probably earn high returns. The best funds in these categories have given very strong returns over the five-year period and are pretty excellent for long-term investors. However, thorough research is required. Consider every relevant factor before you put your money into it; make sure that it aligns with your financial goals and risk tolerance.
