Flexi cap vs multi cap: Which is better for you?

Summary: Flexi-cap or multi-cap fund, which is the right choice for you? We breakdown their differences to help you better decide before investing.

If you invest in equity funds, you should be familiar with the flexi-cap and multi-cap categories. Naturally, you might wonder which is better and whether you should invest in them or not. Let's understand them both in detail.

Initially, multi-cap funds simply had to invest 65 per cent of their assets in equities. Following the changes made to the scheme characteristics by SEBI in September 2020, the multi-cap funds in their current form came into existence w.e.f. January 2021.

In November 2020, SEBI introduced a new category: flexi-cap funds.

Which is suitable for you?

Both categories of funds in their current form have existed since January 1, 2021, which is too short a period to determine which performs better. Moreover, both have different allocations across large-, mid- and small-cap stocks.

However, both flexi-cap and multi-cap funds aim to provide growth in the long term. But the choice of fund entirely depends on your risk tolerance and investment horizon. Go with a multi-cap fund if you can handle the volatility that comes with a 50 per cent allocation to mid- and small-cap stocks. Alternatively, you can opt for a flexi-cap fund, which, on average, has only 25-30 per cent allocation to mid- and small-cap stocks.

To find out our top-rated flexi-cap funds, head to the category’s Fund Monitor section. You can also get a snapshot of their performance, as well as metrics such as expense ratio.

This article was originally published on November 15, 2022, and last updated on December 24, 2025.