Flexi Cap vs Multi Cap Mutual Funds: Top 3 schemes compared on standard deviation and CAGR – Which category delivered higher returns and lower volatility? – Mutual Funds

Flexi Cap vs Multi Cap Mutual Funds: Standard deviation measures how much a fund’s returns deviate from its average. It helps investors understand how ‘smooth’ or ‘bumpy’ a fund’s performance has been over time. For mutual funds, a lower standard deviation is generally better if you want lower risk and less fluctuation in returns. Standard deviation basically measures the volatility of mutual fund returns. A lower standard deviation indicates relatively smaller fluctuations around average returns.When you see a high standard deviation, it indicates that past returns of the fund have varied greatly from their mean, with greater ups and downs. On the contrary, when you see a mutual fund with low standard deviation, it suggests steadier performance, giving investors more predictable returns.

During periods of market volatility, investors may hesitate to reassess their mutual fund portfolios, particularly when choosing between diversified fund categories. Both multicap and flexicap funds invest in large cap, mid cap and small cap stocks, but they differ in how fund managers allocate investments across these market segments. Equity mutual funds witnessed a sharp rise in investor inflows even as the overall mutual fund industry recorded substantial net outflows during the month, according to the latest September data released by the Association of Mutual Funds in India (AMFI). Net inflows into equity-oriented mutual fund schemes surged 30.61 per cent month-on-month to Rs 38,306.55 crore, compared with Rs 29,328.62 crore in the previous month. Flexi cap mutual funds attracted Rs 6,701.80 crore in September, up from Rs 5,059.42 crore in August, an increase of approximately 32.5 per cent and Multi cap schemes attracted Rs 3,859.55 crore.

Flexi Cap vs Multi Cap Mutual Funds

The primary difference between flexi cap and multi cap mutual funds lies in their mandatory asset allocation rules: multi cap funds must invest at least 25 per cent each in large, mid, and small cap stocks, whereas flexi cap funds have no fixed limits and let the fund manager dynamically shift allocations based on market conditions.

Allocation Rules: Multi cap funds follow a strict rule-based structure totalling at least 75 per cent equity (25% large cap, 25% mid cap, 25% small cap). Flexi cap funds require a minimum of 65% in equity, with absolute freedom for the fund manager to invest any proportion across sizes.

Flexi Cap vs Multi Cap Mutual Funds: Top 3 schemes compared on standard deviation and CAGR

Kotak Multi Cap Fund – Direct Plan

HDFC Flexi Cap Fund – Direct Plan

Nippon India Multi Cap Fund – Direct Plan

JM Flexi Cap Fund – Direct Plan

Mahindra Manulife Multi Cap Fund – Direct Plan

(Source: Fund fact sheet)

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)