InvestorQ : What explains the sudden interest in flexi-cap funds in the recent past, I am especially talking about the NFOs?
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What explains the sudden interest in flexi-cap funds in the recent past, I am especially talking about the NFOs?

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Rashi Mehra answered.
4 months ago
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Here is what you need to know about the recent flexi-cap rush among investors.

· Let us look at the NFO response. Last month, ICICI Pru Flexi Cap Fund raised over Rs.10,000 crore in its NFO. In August, Nippon Flexi Cap fund closed with Rs.3,000 crore worth of collections, literally giving the boost to MF flows.

· Another way to look at flexi-cap funds is via the AUM of the category. Today, the AUM of flexi-cap funds is just lower than the large cap AUM. With the string of flexi-cap NFOs expected, they will soon large cap funds. Most multi-caps have now become flexi-caps.

· Let us turn to the returns on flexi-cap funds. In the last 5 years, flexi-caps gave average return of 14-15% annualized, which is extremely attractive. Even the worst-case yield on these funds has been 10-11% over five years.

· Above all, these flexi caps combine the stability of large caps with the growth potential of smaller stocks and give you a combined and diversified portfolio. That helps to generate adequate alpha over a longer time period.

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