Investing in a mixed set of funds (Large, medium and small cap) allows an investor to stay on the safer side of risk and minimize volatility.
Flexi-cap funds, essentially, have no restrictions on the market capitalisation of the stocks they can invest into. While large cap funds mainly invest into blue-chip company stocks , and the same follows for mid cap funds and small cap funds , flexi cap funds can alter their asset allocation strategies by switching between the three market caps as they deem fit.
In that respect, they enjoy a wider range of stocks to choose from. "Flexi cap funds' flexible mandates allow them to rapidly adapt their portfolios to changing market dynamics, thereby allowing them to potentially capitalise on short term trends," says Mayank Bhatnagar, COO, FinEdge.
