Flexi cap inflows triple in FY25 as investors chase flexibility

Amid cautious optimism in the Indian equity market, Flexi Cap funds have emerged as a preferred choice for retail investors. The category saw net inflows surge over threefold in FY25 to ₹49,580 crore from ₹15,502 crore in FY24, driven by its ability to navigate uncertain market conditions.

“In the current environment of shifting global cues and valuation disparities across market caps, Flexi Cap funds stand out for their built-in adaptability,” said Rahul Singh, CIO, Equities at Tata Asset Management. The fund’s strategy allows reallocation between large, mid-, and small-cap stocks depending on market dynamics, offering diversification and resilience in volatile conditions.

Within this fund category, the Tata Flexi Cap Fund recorded over 25% year-on-year growth in inflows in FY25, with investments particularly from Delhi growing by 12% to ₹18.03 crore, reflecting growing investor confidence, Tata Asset Management stated.

Flexi cap funds give money managers the flexibility to shift towards large caps during uncertain times for stability, and move into mid- and small-caps when the potential for higher returns outweighs the risks. This built-in flexibility to reallocate assets across market-caps helps portfolios remain resilient even when specific market segments underperform.

“For retail investors, this dynamic approach offers both diversification and the agility needed to respond to changing market conditions,” Singh said. 

The built-in flexibility of this fund makes it a smart choice for retail investors seeking a single, adaptable investment solution in a volatile market, the company stated.