Multi-cap and flexi-cap funds are mutual fund options that invest across different market capitalizations, but differ in their investment strategies and recommended investors. Multi-cap funds require a minimum of 25% investment in small, mid, and large-cap stocks per SEBI guidelines, while flexi-cap funds do not have allocation restrictions but do not follow the same guidelines.
Multi-Cap Funds
These funds are obliged to invest at least 25% of their portfolio in large-cap, mid-cap, and small-cap equities. They are advised for long-term investors with a high risk tolerance.
Flexi-Cap Funds
Compared to multi-cap funds, these funds provide greater diversity and flexibility. They are not constrained by a minimum or maximum allocation to any market capitalisation, allowing them to invest across market capitalisations. For moderate investors hoping to build money over time, they are usually advised.
Here are some Key diff b/w multi-cap and flexi-cap funds:
