Freedom to shift across market caps helps mitigate risks

Flexicap funds witnessed net inflows of ₹5,733 crore in June 2025, a 49 per cent increase over May, according to data from the Association of Mutual Funds in India (Amfi).

- HIMALI PATEL

The surge reflects growing investor preference for agile funds that can handle volatility.

Rising investor interest

Recent turbulence in mid and smallcap segments has prompted a shift towards flexicap funds. "Flexicap funds have gained traction in 2025 due to their ability to dynamically allocate across large, mid, and smallcap stocks, offering adaptability in volatile markets," says Trideep Bhattacharya, chief investment officer-equities, Edelweiss Mutual Fund. Mid and smallcap valuations remain elevated. "Many flexicap funds are currently overweight on largecaps. Investors seeking relative safety are hence choosing these funds," says Mohit Gang, co-founder and chief executive officer (CEO), Moneyfront.

Recent outperformance by some leading flexicap schemes has also contributed to higher inflows.

Score on flexibility and adaptability