Focused funds vs Flexi-cap funds: The better option?

Focused funds and flexi-cap funds are two sides of the same coin. They are different but closely related. Closely related because they both are allowed to invest in companies of all shapes and sizes and different because focused funds concentrate on no more than 30 stocks, while flexi-cap funds have no such restrictions. Performance: Focused funds vs Flexi-cap funds Given their striking resemblance, it's not surprising that there's hardly any difference between them on the performance front, with focused funds holding a teeny-weeny advantage of up to 0.3 per cent in the last five years (daily rolling returns from November 2019-2024). Risk-adjusted performance However, when we dug deeper and looked at the risk-adjusted performance of the two fund types, our analysis presented a different picture. For those unaware, when evaluating performance, it's not just about high returns but also how much risk is taken to achieve them. So, we loo