How To Select The Right Flexi-Cap Scheme For Your Portfolio—The Mutual Fund Show

While multi-cap funds must invest equally in large-cap, mid-cap and small-cap stocks, flexi-cap funds have no such rules. This can work to the advantage of mutual fund investors.

Piyush Gupta, director-funds research at Crisil, said equity funds are ranked on the basis of five factors. These include performance, which carries the most weight, followed by volatility, sector-level company diversification and portfolio liquidity. "All of these factors are combined together to arrive at the final ranking within the universe."

ICICI Pru Bluechip, Nippon India, and JM are the top performing large-cap funds, according to Crisil; while Mirae Asset Large Cap Fund is the worst performer in this category.

Among flexi-cap funds, Bank of India Flexi Cap Fund, JM Flexi Cap Fund, and Edelweiss Fund are the leading performers, with UTI Flexi Cap Fund performing the worst.

ITI, Motilal Oswal, and Quant are the top mid-cap funds; while DSP, PFIM India, and UTI are the laggards. For small-cap funds, Quant Small Cap Fund, Bandhan, and Franklin India are the top performers.

Query 1: Is it better to create an emergency fund in a high-yield savings account with 7% returns or to buy a liquid fund for long-term? I want to move Rs 20 lakh invested from regular mutual funds to direct funds, considering the tax implications and market conditions.

Name: Anuj I Age: 40 years

Nisreen Mamaji: I recommend arbitrage funds as they offer the advantage of equity taxation, along with a high-yield savings account or equity funds.

Query 2: I want to invest Rs 8 lakh in mutual funds to create a corpus for my daughter's education. I'll need it after eight years and a retirement fund for my husband after 10-12 years. Can you recommend a few schemes?

Name: Sheetal Gonsalves I Age: 43 years

Nisreen Mamaji: I will suggest a flexi-cap fund such as Motilal Oswal Flexi Cap Fund, Bandhan Core Equity, and ICICI Pru India Opportunities. Allocate Rs 2,00,000 to Motilal Oswal Flexi Cap Fund, Rs 1,50,000 to Bandhan Core Equity Fund, and Rs 1,50,000 to ICICI Pru India Opportunities Fund. Additionally, consider ICICI Pru Business Cycle Fund for Rs 3,00,000.