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Summary: One flexi-cap fund has been upgraded to five stars, just a few years after launch, mainly thanks to its strong performance in recent years. But does a five-star rating automatically make it a must-buy? Let’s find out.
A flexi-cap fund gives the fund manager complete freedom to move between large, mid and small-caps depending on where opportunities lie. For most investors, at least those who have been investing for around three years, it’s the one equity fund that can serve as the core holding in their portfolio.
And Indian investors clearly agree. Flexi-cap funds have attracted over Rs 30,000 crore net investments in the first half of 2025, cementing their position as the go-to category for long-term wealth creation.
But how long should you invest in one? Ideally, at least five years or more. Equity markets move in cycles, and flexi-cap funds need that much time to deliver on their promise of both growth and stability.
How Value Research Rating works
At Value Research, we assign star ratings to funds based on their risk-adjusted past performance compared to peers. It’s a purely quantitative assessment, not influenced by opinions. Think of it as a snapshot of how well a fund has rewarded investors relative to the risk it has taken.
And this month, one relatively young player has made it to the top.
Invesco India Flexi Cap joins the five-star club
The Invesco India Flexi Cap Fund, managed by Amit Ganatra and Taher Badshah, has been bumped up to five stars this month, a remarkable feat given it was launched just a few years back, on February 14, 2022, to be precise.
And its performance has been robust.
- One-year returns: 9.58 per cent (second-best in category, just behind Parag Parikh Flexi Cap)
- Three-year returns: 24.06 per cent (best among flexi-cap peers)
- Since launch (Aug 18, 2018): 21.93 per cent
Additionally, the fund’s direct plan charges an expense ratio of just 0.58 per cent, which is lower than the category median of 0.62 per cent.
Being a relatively young flexi-cap fund, analysing its rolling returns doesn’t give much insight into consistency. Instead, if we look at its full calendar-year performance, the results have been quite encouraging.
- 2023: Grew 35.7 per cent vs its benchmark’s (Nifty 500 TRI) 26.6 per cent
- 2024: Grew 36 per cent vs Nifty 500 TRI’s 15.67 per cent
A concentrated but growth-heavy portfolio
That said, on a portfolio level, the fund seems a little concentrated, with its top five holdings—ICICI Bank, HDFC Bank, Eternal (Zomato), Interglobe Aviation (Indigo) and Trent—account for about a quarter of its assets. In fact, just ICICI Bank and HDFC Bank together make up 12.5 per cent.
This concentration means slightly higher volatility, illustrated by the fund’s slightly higher standard deviation (SD) of 13.9 per cent, compared to the category average’s 13.12 per cent and the benchmark’s (Nifty 500 TRI) 13.53 per cent.
For the uninitiated, think of SD as a measure of how much a fund’s returns swing compared to the average. For example, if two funds both average 12 per cent annual returns, but Fund A usually moves between 10–14 per cent while Fund B swings between 6–18 per cent, Fund B has higher SD, which means more ups and downs.
Another thing to note is that the fund, which holds net assets worth Rs 3,426 crore, currently has higher valued stocks, with a P/E multiple of 42.12, second only to Motilal Oswal Flexi Cap (P/E of 56) among all four and five-star rated flexi-cap funds.
Should you invest?
So, does this new five-star rating make Invesco India Flexi Cap an instant buy? Not so fast. While its one- and three-year numbers are stellar, remember: past returns are never a guarantee of future performance.
Moreover, our star rating is only a starting point. The real question is whether a fund shows consistency across market cycles, whether its portfolio construction inspires confidence and whether it aligns with long-term investor needs.
That’s exactly what our analysts track in Value Research Fund Advisor—where we don’t just look at the past but also evaluate a fund’s strategy, portfolio quality and suitability for long-term wealth creation.
If you want to know whether Invesco Flexi Cap makes it to our recommended list of funds for the next decade, check out Value Research Fund Advisor. It’s the simplest way to cut through the noise and build a portfolio you can hold with confidence.
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