Flexicap investing: a smart approach with long-term potential

INVESTING IN THE markets over the past 12-14 months has been tricky, with volatility being quite high and frontline Indian indices still in the red over this period, underperforming most Asian and advanced economies.

- CHINNADURAI KANNIYAPPAN

However, the domestic macroeconomic environment is fairly positive despite trade tariffs and geopolitical escalations. India's GDP growth for FY26 is expected to be 6.5 per cent. According to the RBI, inflation is modest and interest rates are set to get lower, fiscal deficit is under control and tax collection is healthy.

Recent GST and income tax cuts would give further impetus to consumption. Government infrastructure spending is back on track after a lull. Corporate earnings growth has revived significantly.

The only discomfort comes from valuations that are not cheap from an overall broader market perspective.

Taking the flexicap route to investing would work well in the current environment. Such investing would ensure a measured allocation across large, mid and small cap companies depending on a host of factors. This approach also ensures portfolio diversification in investing across broader markets.

Why flexicap investing works