Multi-cap v/s Flexi-cap!

Multi-cap funds have consistently outperformed flexi-cap funds over 1-year, 3-year, and 5-year periods, mainly due to the superior performance of smaller-cap indices. Flexi-cap fund managers tend to adopt a more conservative approach, allocating most of their capital to large-cap, front-line stocks. Despite having the flexibility to increase their exposure to smaller stocks, they often prefer to concentrate on market heavyweights. While their performance often surpasses that of traditional large-cap funds, they generally trail multi-cap funds. This is because managers of multi-cap funds are required to invest a minimum of 25% in large, mid, and small-cap stocks, allowing them to benefit from the higher returns of smaller-cap stocks.