Flexi-cap funds have the flexibility to invest. In this, the fund manager can invest the investor’s money in small, mid or large cap according to his own.
Mutual Funds Investment: Even though the stock market is going through a period of ups and downs, but the trust of investors in mutual funds remains intact. Despite the volatility in the market, there has been a lot of investment in equity mutual fund schemes in the month of May. Association of Mutual Funds (AMFI) has released the investment data in mutual funds for the month of May. According to which an investment of Rs 18,529.43 crore has come in Equity Mutual Fund. The maximum investment has come in Flexi Cap Funds. A total of Rs 2938.93 crore has been invested in Flexi Cap Funds in the month of May. There has been a steady stream of good investments in Flexi Cap Funds since the last few months. In the financial year 2021-22 also, there was a total investment of Rs 35,877 crore in flexi cap category.
What is Flexi-Cap Fund
Talking about flexi-caps, it is a category of equity mutual funds. Flexi-cap funds have the flexibility to invest. In this, the fund manager can invest the investor’s money in small, mid or large cap according to his own. In this, there is a facility that investors can transfer money to the sectors or funds that are doing well. For example, if the performance of largecaps is good, then fund managers shift money from midcaps or smallcaps to largecaps. Similarly, it is also in the position of doing well for midcap or smallcap.
Why is trust increasing on multicaps?
AK Nigam, Director of BPN Fincap, looking at the current mood and environment of the market, investors are completely confused. In such a situation, their trend towards flexi cap funds has increased. Here there is a facility that your money is invested in largecap, midcap and smallcap equities. Second is the facility that money can be shifted in the category which improves further. Whereas multicap funds do not have this facility. At the same time, at least 25 percent allocation is necessary in largecap, midcap and smallcap.
who should invest the money
He says that if you want to invest in equity funds but do not want to take high-risk exposure, then you can invest in better rated flexi-cap funds. These funds are also well diversified in terms of market capitalization. This category may give lower returns than small and mid-cap funds, but they can give stable returns during volatility. The risk in them is also very less.
Earnings from equity funds are subject to short term capital gains (STCG) tax if investments are redeemed in less than 12 months. According to the current rules, tax is levied up to 15 percent on the income earned from it. If your investment is for more than 12 months, then it will be considered as Long Term Capital Gains (LTCG) and 10 percent interest will have to be paid on it.