Flexi Cap Mutual Funds

A flexi cap fund is an equity mutual fund that invests in companies of all sizes and across sectors without any market cap-based allocation limits. However, minimum investment should be 65% of total assets in equity and equity-related instruments. Due to a flexible investment strategy, the fund managers can adjust the allocation between different market segments based on market conditions, company performance, sector rotation and valuation opportunities. 

According to SEBI’s regulations, a flexi cap fund must invest at least 65% of its total assets in equities and equity related instruments. Beyond this limit, the fund manager has complete freedom to allocate investments across large-cap, mid-cap and small-cap stocks.

Fund managers actively adjust the portfolio based on market conditions, valuation opportunities and the growth potential of companies across different market capitalisations. This flexibility allows them to increase or reduce exposure to a particular market segment whenever required.

You can invest in Flexi Cap Funds through Paisabazaar by following the steps given below:  

• Open the Paisabazaar app and log in.
• Click on ‘Mutual Fund’ .
• Browse or search for the mutual fund you want to invest in.
• Choose your investment mode (Lump sum investment or SIP).
• Enter your investment amount. 
• Complete your KYC verification to start your investing journey.

Flexi cap mutual funds are treated the same as equity funds and taxed accordingly: 

• Short-Term Capital Gains (STCG): If you sell your units within 1 year, the capital gain will be classified as short-term capital gain (STCG). The tax of STCG is 20%. 
• Long-Term Capital Gains (LTCG): If you sell your units after holding them for more than 1 year from the date of purchase, the capital gain is classified as long-term capital gain (LTCG). LTCG upto Rs. 1.25 lakh is exempt from tax, gains above this threshold are taxed at 12.5%.
• Dividend Tax: In addition to capital gains tax, those who have opted for a dividend plan and received dividends under the IDCW (Income Distribution cum Capital Withdrawal) option will be taxed according to their applicable income tax slab. The tax rate will depend on the tax bracket of the investor.