3 ways you can get better diversification and returns than flexi-cap funds

Flexi-cap funds, as their name implies, have the most flexible mandate among equity funds. They can invest across all market caps and in any proportion. So, it may appear that all you need to do is to invest in a couple of flexi-cap funds. But are flexi-cap funds really flexible?
Our analysis reveals that flexi-cap funds have had a longing for large-cap stocks and since 2018, on average, 65% of flexi-cap funds’ portfolios have been invested in large-cap stocks. So, they haven’t really used the flexibility to move into mid and small caps to boost returns. The high allocation to large caps has compromised the return profile of flexi-cap funds as well and their return experience now approximates that from the Nifty 50.
What are the alternatives? There are 3 alternatives to flexi-cap funds that we have discussed in the video. Also, we have discussed how you should approach flexi-cap funds now.
Chapters
00:00 Introduction
01:15 Are Flexi Cap Funds flexible enough?
01:56 Market Cap allocation
03:35 Performance
06:13 Alternatives to Flexi cap
08:12 Conclusion
Link to our earlier video on multi-cap funds: • Multi-cap funds: A sma...
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[@abhimanyu.juneja]

I dont know why only the NIFTY index is used as a barometer to arrive at conclusions. The individual funds are consistently beating the benchmarks by quite a margin. Eg. Quant Flexicap fund's 5 yr. CAGR stands at 27.5% which is unparallel.

[@manashsarkar3258]

They compare with flexi cap category average.

[@puneetporwal]

I think the question is whether individuals funds that have performed well historically will continue to do so. May be some other fund from the category could become the leader.

[@ETMONEY]

Hello, given the higher allocation of flexi-cap funds to large-cap stocks, we wanted to check how much better they are doing than a pure large-cap index. If the difference in performance isn't much, which indeed turned out to be the case, these funds aren't really using their flexibility to earn better returns. The returns you have mentioned are trailing returns and they tend to get impacted by recent performance. We have used rolling returns in our analysis, which are more reliable and give a clearer picture. Also, our analysis is category wide. There can be individual outliers within the category.

[@dhingchyakhinduja6031]

@@ETMONEYDo you understand difference of 12-13% and 16-18%? If yes then you will understand why Flexi cap fund is required.

[@jishnu18]

Quant flexi cap started only on 2021. It was a different sectoral fund which was renamed as quant flexi cap fund. So the returs are far from what you see​@@dhingchyakhinduja6031

[@naveenkumarsharma2716]

Excellent presentation and clarification of different Funds 👏👏👏👏

[@nileshmore7888]

I have parag parikh flexi cap , canera rubaco bluchip , kotak equity opportunity and axis small cap . Is it overlapping or right

[@tarungarg4627]

Great insights 👍

[@rajatmadhok20]

Similarly you should review your Genius portfolios against benchmarks and Flexicaps.

[@raghubalank]

I have invested in 3 genius portfolios for the past 9 months. Pls do a few videos on their performance. Pls explain the rationale of monthly rebalancing, as I feel quarterly rebalancing options would be better considering the short term capital gains.

[@ETMONEY]

Hello, thanks for your suggestion. Will pass it to our content team.

[@hiteshdesai5354]

I completely agree with your views . Because same happened with me..when I see the.my genius portfolio i have to make huge Short term capital gain tax.

[@akshaynaik1719]

How is largemidcap 250 index 50:50 allocation and rebalanced quarterly

[@NoOne-p1i]

If i have few laks worth of gold, real estate and FD already. Do i still need to have debt funds in my portfolio? Or can go all in equities?

[@duttasaby]

As a Genius investor, rebalancing rationale and regular portfolio performance review by a staff member would be adding to investor confidence, maybe as a private video. Talking specifically about Stocks+Etf portfolio. Similar updates are provided regularly by TejiMandi

[@ETMONEY]

Hello, thanks for your suggestion. Will share it with the team concerned.

[@prasadpasala1340]

you explained about different categories of funds, gave good advice to those who like to take more risk. your videos are very helpful with actionable information. this helps investors in taking better decision in investment in MFs thank you

[@ETMONEY]

Hi, nothing pleases us more than knowing that our content proved useful to our viewers. Do take out time to share it with your near and dear ones as well.

[@shrenik007]

What about expense ratios???

[@tareshyadadv1214]

Excellent 👌👌👌

[@ETMONEY]

Hello, we are happy to know that you found this video useful. Please share it with your friends and family as well and help spread the word.

[@ashoksamrat3144]

Flexi cap fund vs nifty 500, index fund s what are the differences

[@PankajPoddar]

One just needs three funds. Just buy the (1) Smallcap top 50 index fund (25 %), (2) Midcap 150 index fund (or Midcap momentum top 50 fund) 25 %, (3)Multiasset fund like ICICI Multi-asset (debt, commodity, large-cap) or ICIC equity and debt fund (aggressive hybrid) 50%. This will complete the mutual fund food plate with enough diversification across the asset classes.

[@puneetporwal]

How did you go about selecting icici multi asset or icici equity and debt fund?

[@PankajPoddar]

@@puneetporwal You can select any other fund. Nothing special here.

[@ETMONEY]

Hello, thanks for sharing your perspective.

[@MINATOYELLOWFLSH2005]

Keep sizeable money under SGB. Its best with almost 0 risk. Very few stocks beat its returns in last year's.

[@puneetporwal]

@@MINATOYELLOWFLSH2005 would it be wise to choose asset class based on returns of one particular year?

[@ShikharBir97]

The 50:35:15 allocation makes sense

[@ETMONEY]

Hello, those who want a portfolio customised to their requirements can invest separately in large-, mid- and small-cap funds in the desired proportion. This portfolio can then be rebalanced periodically.

[@rajeshshinde663]

I have 40% in PPFAS, 40% in Nifty 50 Index, and 20% in Nifty Next 50 Index. Does this seem good ? Am I i over investing in Large caps here ? Also, thinking of adding Midcap fund. Please suggest.

[@ETMONEY]

Hello, yes, you predominantly have large caps in your portfolio. Even Parag Parikh Flexi Cap Fund is heavy on large caps. Based on your goals, risk profile and requirements, you can take an appropriate decision.

[@user-lq9fz4bi1n]

Flexi Cap Fund (also known as Index Fund)

[@mallikarjunbyravarasu3154]

Flexicap funds invest in foreign stocks also?

[@ETMONEY]

Hello, yes, some flexi-cap funds do. However, they are subject to the RBI's limit on overseas investments by mutual funds.

[@PankajPoddar]

It's myth that Nifty 50 index is less volatile. I find it highly volatile due to FII interest.

[@puneetporwal]

Would be great if you can present some numbers. Thanks.

[@PankajPoddar]

@@puneetporwal Just compare Nifty 50 one year up down and ICICI debt and equity or ICICI multi asset. I love them due to their relative less volatility.

[@ETMONEY]

Hello, Nifty 50 is a pure equity index. It will likely be more volatile than a fund which has a debt component in its portfolio.

[@nightwatchman6734]

@@PankajPoddar Hello Brother ☺, I'm in my early 20s and planning to be an aggressive equity and an ultra long term investor, basically having a higher risk tolerance and having enough patience to get high returns in a long period. I'm gonna start my investment on APRIL 2024(next financial year). I don't have any specific goal oriented investment, better to say, that I'm investing for generational wealth creation or at least for my post retirement stage. 1. EDELWEISS Nifty 50 index fund (for Mega cap exposure) ~ 10% Allocation (0.05% ER) 2. EDELWEISS Nifty Next 50 index fund (for Large cap exposure) ~ 10% (0.09% ER) 3. EDELWEISS Nifty midcap 150 momentum 50 index fund (for Mid cap exposure - only smart beta fund in my portfolio) ~ 30% (0.14% ER) 4. Nippon Indian small cap fund (for Small cap exposure - only active fund in my portfolio) ~ 40% (0.67% ER) 5. ICICI prudential Nasdaq 100 index fund (for global exposure - only international fund in my portfolio) ~ 10% (0.50% ER) These are my 5 Definite Index/active mutual Funds which I will start, once I opt to invest. So literally investing in all the companies listed in the NSE from 1 to 500, where instead of investing in direct Nifty 500, I have diversified my entire portfolio based upon market capitalisation. Investing method will be completely in step up SIP and will also actively increase or decrease the SIP regarding the market fluctuations - investing more when the market dips and less when it's at an all time high. By saying this I have already covered my health insurance and term insurance and also have a good chunk of emergency fund. And also I'm not interested in any other asset classes such as Savings Account, FD, RD, PPF, NPS, REITS, Debt Funds, bonds, stocks, ETF's, Cryptocurrency, Real Estates, etc currently. Maybe in my late 20s, i.e.after marriage I will slowly start to include some of the other options. So as of now, apart from index funds I may have one more asset class - Gold via SGB (not sure even i will try this) As I'm at the initial stage of investing, I don't want to try hands on with direct equity/stocks. As it required huge research and continuous monitoring. I love to be a passive investor, that's why I have even chosen Index Funds over Active Mutual Funds. Sorry for the long para, but I need some prerequisite context to convey my thought process towards my Investment Portfolio, so that you can get a glimpse of my investing style to guide me. So my query is, is it really good to have only these 5 Funds in my portfolio regarding equity Funds, as inclusion of any more fund will result in overlapping. Is my investing style of only depends on Index is a good strategy, at least in my early stage of building wealth and considering my long run in investing? And i will be pretty happy if my portfolio has a CAGR above 12% in the long run. Can you share your valuable thoughts over my vision and correct me if I'm wrong? And also regarding the small cap fund, I also want to choose a small cap index fund namely nifty smallcap 250 momentum quality 100 which is better than the parent index (SC 250) , but currently there is only an ETF option available. So should I wait for an AMC to launch it as I'm just starting to invest or till that can I invest in SC 250 quality 50 or with the above mentioned Nippon India SC fund? Thanks in advance♥

[@mihirpatel5581]

Pls start idcw option on your app

[@ETMONEY]

Hello, thanks for your suggestion. Will share it with our product team.

[@mihirpatel5581]

@@ETMONEY Pls suggest mf for monthly passive income

[@mounigupta9090]

0:21 topic starts

[@abhijitjacob]

I want to take average stupidity of a youtube finfluencer and apply to the creator of this video but it may be unfair to others. While I can invest in nifty 50, I cannot invest in all flexicap of which average is presented here. People are looking to choose 1 or 2 funds. If they outperform index, mission accomplished!