India’s Flexi Cap Funds See AUM Surge 148% Over Four Years
Strong returns, flexibility across market caps, and growing investor interest drive record growth.
Mumbai: India’s flexi cap mutual funds have witnessed a remarkable 148.28% increase in assets under management (AUM) over the past four years, according to a report released on Tuesday.
The report noted that in the last five years, top-performing flexi cap funds have delivered returns exceeding 20%. According to ICRA Analytics, the AUM of flexi cap funds rose to ₹5.52 lakh crore in December 2025, up from ₹2.22 lakh crore in December 2021.
Monthly net investments in these funds have also seen a sharp rise, increasing by 316% over four years to ₹10,019 crore in December 2025, compared to ₹2,409 crore in 2021. Since the beginning of FY2026, investments have grown 78.44%, up from ₹5,615 crore in March 2025.
Investors are drawn to flexi cap funds because there are no fixed allocation limits across large-cap, mid-cap, or small-cap stocks. This allows fund managers to invest freely across any category depending on market conditions.
Ashwini Kumar, Senior Vice President and Head of Market Data at ICRA Analytics, said, “Flexi cap fund managers have the flexibility to adapt to changing market conditions and adopt a dynamic approach, which ensures better diversification and risk management by combining large-cap stability with mid- and small-cap growth potential.”
He added that investors prefer these funds because they tend to be resilient during market downturns and generally provide better downside protection compared to pure mid-cap or small-cap funds.
Currently, around 24 flexi cap funds are available in the market, with an average five-year annualized return of 16.08%, while top-performing funds have delivered over 20% annualized returns over the same period.
The number of flexi cap portfolios has doubled from 1.10 crore in December 2021 to 2.21 crore in December 2025. The report highlighted that growing retail investor participation, strong SIP contributions, and the expansion of India’s equity markets are expected to help this category maintain double-digit annual growth in the coming years.
