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INVESTMENTS THROUGH MULTI-CAP AND FLEXI-CAP FUNDS

Multicap and Flexicap funds are equity Mutual funds that are invested in businesses of all sizes and market capitalizations. 

Multicap funds :  The Securities and exchange Board of India (SEBI) requires Multicap funds to invest atleast 255 of their assets in each of the three market capitalization segments – Large-cap, Mid-cap and small-cap. Thus it can be implied that Multi-cap funds have a diversified stock portfolios,which can assist in decreasing risks. Multicap funds are invested in a major amount of their assets within large cap stocks (that are often seen as less hazardous than any small-cap equities. 

Flexicap funds :  Flexicap funds are not required by law to deploy the assets across different market capitalization groups. This provides fund-managers more freedom to invest in equities that they feel to have the most potential values. Flexicap funds can be invested in a variety of equities, ranging from large-cap blue chips to small-cap growth businesses. This allows the investors to participate in the growth of all areas in the equity market.

Multicap funds and Flexicap funds are the two forms two forms of equity Mutual Funds that can provide investors with diversified stock portfolios. The optimal sort of funds can be determined by investing objectives and risk toleration. Though Multicap funds are more cautious than Flexi-cap funds, but flexicap funds offer the potential for bigger returns.