The flexicap mutual fund has the potential to give best return among all the categories of mutual fund. As the name suggests these funds are very flexible in share selection. The best flexi cap mutual fund would be the best performing mutual fund. In this post, I have selected promising flexicap mutual fund for 2017.
Mutual funds are a vehicle of investment which collects money from many people. The accumulated money is invested into the shares or debt market. A professional fund manager manages the investment of this accumulated corpus. A research team helps the fund manager in the selection of best shares. The mutual fund company takes some fees for this service. This charge ranges from 1-3%. Because of the mutual funds, A common investor can take services of the professional fund manager. Also, because of the mutual fund, a small investor can enjoy the benefit of diversification without putting a large amount.
What is A Flexi Cap/Multi cap Mutual fund
Every mutual fund scheme has a defined objective. This objective is fixed with the launch of a mutual fund scheme. Some mutual fund scheme invests in debt market while other invests in share market. Some scheme invests only in the big companies while some in mid and smaller companies. But those mutual fund schemes which don’t restrict themselves to a particular type of shares are the flexicap mutual fund.
Flexicap or multicap mutual funds invest across the share market. These funds are not restricted to big, mid or small companies. These funds scout for opportunities irrespective of the company size. However, in practice, the flexicap mutual funds avoid smaller companies.
What are the Qualities of best Flexicap fund
Why Do you want to invest in Flexicap Mutual fund? Why not into a best large cap or balanced fund? Because, You want the best return from share market. For you the size of a company doesn’t matter unless it gives good return. You are aware of the risk that is why you are investing in the share market through the mutual fund, but you want more return than the fellow mutual fund investors. You need following qualities in a flexicap fund.
- The flexicap fund should give better return than the share market.
- It should slide less when there is a turmoil in the market. It is obvious requirement.
- The fund should not go through the roller coaster ride. Rather it should show the resilience.
- The fund and its management should have a good reputation.
I have a defined selection process of the best mutual fund in a category. I go through some basic parameter to pick the best flexicap mutual fund. These parameters are the performance, risk and fund manager. Besides these basic parameters, I also go through the asset under management and portfolio.
I would like to clarify that I had to skip direct funds as the don’t have history of direct funds before 2013. While for the perfect assessment, the history of at least 5 years is required. But, you must invest in direct funds, if you can. As you know that every regular fund has the ‘Direct’ version as well. The ‘Direct’ version of a mutual fund is similar to regular fund in every aspect except commission. Direct fund don’t give commission to distributor hence give more return.
This is the most important factor when you invest in flexi cap mutual fund. As, Good return is our primary motive of mutual fund investment. It should be better than the market average. The best flexicap fund should give more return than the category average.
To pick the best performing mutual fund, I have gone through the return of every fund in the last 3 and 5 year. I did not consider the 1-year return as it is a short period to judge a mutual fund scheme.
This is another important factor to judge a mutual fund scheme. We all know that investment in shares is risky. Market sentiments can change overnight. Not only this small and mid size companies are more volatile which makes the flexicap mutual fund more risky than the large cap mutual fund.
We also know that higher return comes with the greater risk. However, If possible, we should ry to minimize the risk. Rather a best flexicap mutual fund would be those which give higher return with lesser risk. Therefore, I would also assess the flexicap mutual fund on the basis of risk.
It is judged on the basis of stock selection and portfolio churning. To make things simple, the mutual fund research companies assigned Risk grade to every equity mutual fund scheme. This is done automatically on the basis of past data.
So, to get the best flexi cap/multi cap mutual fund I have excluded those schemes which take above average risk.
How Old is Fund Manager
A mutual funds performance depends a lot upon the fund manager and his team. It is the ability of fund manager which makes a scheme better performer. The fund manager’s vision and skill ensure the good performance in every circumstance. Indeed, the fund manager is the captain of the ship. If there is a change in fund manager, there can be a change in performance as well.
That is why, it is necessary that old fund manager continues. Hence, I have considered only those funds where lead fund manager would have handled the fund at least for 3 years.
Top 9 best Flexi cap mutual funds
There are only 9 flexicap fund which have given above average return in last 3 and 5 years. Also these funds have taken average or below average risk. These funds are arranged in the alphabetical order.
|Flexicap Fund||Risk||3-year Average Return (%)||5 year Average Return (%)|
|Birla Sun Life India Opportunities Fund Growth||Below Average||21.15||23.15|
|Escorts Leading Sectors Fund Growth||Average||27.04||25.25|
|Franklin India High Growth Companies Fund – Growth||Average||24.24||24.98|
|Invesco India Contra Fund Growth||Average||22.1||19.95|
|L&T India Value Growth||Average||28.81||25.85|
|SBI Magnum Multi Cap Fund Regular Growth||Average||22.03||21.35|
|UTI MNC Fund Growth||Below Average||21.25||21.12|
Top 3 best Flexi cap funds
The list of 9 funds can be further confusing for you. I know that you want the selected few so that you can easily take decision. Therefore to get the top mutual fund I have picked those fund which have given best return in the last five years. Now I have the final top 3 best flexicap mutual funds
|Top Flexi cap Funds||Average Return Per Year (%)|
|1||L&T India Value Growth||28.81||25.85|
|2||Escorts Leading Sectors Fund Growth||27.04||25.25|
|3||Franklin India High Growth Companies Fund||24.24||24.98|
L&T India Value Growth
- The fund was established in 2010
- The fund is tilted towards the large companies.
- Except 2011, this fund has beaten the category average with handsome margin.
- The year 2014 has been quite good for the fund. It gave 20% higher return than the category average.
- The Fund manager Venugopal Manghat is handling this fund since 2012.
- It has given average 25.85% annual return in last 5 year
||L&T India Value||Flexicap Category||+/- Category|
Escorts Leading Sectors Fund
- The fund was established in 2008.
- The fund is focussed on value midcap companies.
- Because of the midcap focus the return of fund is volatile.
- Inspite of ups and down, the fund has given good return in long term.
- In the last 5 years the fund has given average annual return of 25.25%
- The fund manager Sanjay Arora is handing it since July 2013.
||Escorts Leading sector Fund||Category (Flexicap)||+/- Category (Flexicap)|
Franklin India High Growth Companies Fund
- The fund was established on July 2007.
- The fund has seen the extreme downturn and upturns.
- In the last 9 years, It has outperformed the category average 5 times.
- year 2014 has been very good for the fund. It has given 26% return than the category average.
- In the last 5 years It has given 25% annual return.
- The Fund manager Roshi Jain is handling it since 2012.
|Franklin India High Growth Companies Fund||Category (Flexicap)||+/- Category (Flexicap)|
In this post I have picked the top 10 and top 3 best flexi cap mutual fund for 2017. I have also told you the methodology of the fund selection. I have also picked the top large cap fund and mid cap mutual funds. You can check out them as well.
However, I recommend to take the advice of the certified financial analyst before taking any decision. If tax saving is also one of your purpose, you should also consider investing into best ELSS funds. These mutual fund gives you tax benefit as well.
(Data is taken from Morningstar.in on 21 Dec 2016)