NFO Insight: Capitalmind Mutual Fund's flexi cap fund opens for subscription. Will it help to manage current market volatility?

Economic Times

18-07-2025

ETMarkets.com Capitalmind Mutual Fund has launched its Flexi Cap Fund, an open-ended dynamic equity scheme investing across market caps, closing on July 28.
Deepak Shenoy owned Capitalmind Mutual Fund's latest new fund offer of Capitalmind Flexi Cap Fund is open for subscription and will close on July 28. The fund is an open-ended dynamic equity scheme investing across large cap, mid cap and small cap stocks.
The investment objective of this flexi cap fund is to generate long-term capital appreciation by investing predominantly in equity and equity related instruments across market capitalization i.e. large-cap, mid-cap and small-cap stocks.
Capitalmind Flexi Cap Fund is benchmarked against NIFTY 500 TRI and will be managed by Anoop Vijaykumar. The fund will offer regular and direct plans both with growth options only.
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We employ a rule-based active approach using proprietary rule sets developed through an analysis of market, macroeconomic, and fundamental factors. 'Our equity allocation decisions are data-driven, based on objective market variables, including but not limited to macroeconomic variables, current equity market valuations and interest rates. Final investment decisions will be taken by the Fund Manager(s) based on the data referenced above, but may also be based on specific subjective analysis of underlying securities,' the fund house said in the draft document of this fund.
Stock selection and weighting utilize quantitative factor-based methodologies designed to achieve a balanced mix of attributes that support long-term performance within defined risk parameters. A factor represents any quantifiable attribute that significantly explains the risk and/or return characteristics of a security. The Scheme may employ single factors or combinations to enhance diversification and risk control.
For each purchase of units through lumpsum / switch-in / Systematic Investment Plan (SIP), Systematic Transfer Plan (STP), exit load on redemption / Systematic Withdrawal Plan (SWP) / Switch-out, is: (i) If units redeemed or switched out within 12 months from the date of allotment – 1% of the applicable NAV (ii) If redeemed/switched out after 12 months from the date of allotment, the exit load will be nil.The minimum application amount for lumpsum investment is Rs 5,000 and in multiples of Re 1 thereafter. For SIP, the minimum amount is Rs 1,000 and in multiples of Re 1 thereafter with a minimum of 6 instalments.Experts typically ask investors to avoid investing in NFOs unless they offer something unique. The uniqueness could be that the scheme is offering an investment option that is not available in the market or offering something extra to an existing option. Otherwise, the experts believe investors are better off with an existing scheme with a long performance record. This is because you have some historical data to base your investment decision. You don't have any data when it comes to new offerings.An expert while sharing the funds approach for stock selection added that the AMC is a new entrant in the mutual fund industry and the fund doesn't hold any past performance record so choosing from an existing flexi cap fund may be a more prudent approach.
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'Capitalmind is a new entrant in the mutual fund space, with no existing track record of managing public mutual funds. Since this is a New Fund Offer (NFO), there is no past performance data available, making it difficult to assess the fund's potential risk or return,' Chirag Muni, Executive Director at Anand Rathi Wealth Limited shared this with ETMutualFunds.According to the draft document filed with the market regulator by the fund house, the scheme is suitable for investors who are seeking - long term wealth creation and investment predominantly in equity and equity related instruments across large cap, mid cap and small cap stocks.The fund will allocate 65-100% in equity and equity related instruments of large cap, mid cap and small cap companies, 0-35% in debt securities and money market instruments (including cash & cash equivalents), 0-10% in units issued by REITs and INVITs, and 0-5% in units of mutual fund scheme.In an analysis of the latest market capitalisation of 40 flexi cap funds currently available for continuous sale and repurchase, 37 funds are inclined towards large cap, two are inclined towards mid cap and one is inclined towards small cap.In the current volatile market, Chirag firmly says that this is a reasonably good time to consider flexi cap funds, especially for those seeking long-term growth with the potential for alpha generation but it is important to remember that flexi cap funds should not be the only equity allocation in the portfolio.While they are marketed as flexible across market caps, many Flexi Cap funds tend to have a strong bias towards large-cap stocks. Hence, a better approach would be to build a diversified equity portfolio that includes large, mid, and small-cap funds, ensuring a balanced exposure across the market spectrum,' he added.Another expert recommends investors to invest in flexi cap funds through SIP as this will allow investors to average out entry points during market volatility. 'SIPs help reduce timing risk and build long-term exposure systematically. While valuations in parts of the market may look stretched, delaying investment completely may lead to missed opportunities. For those concerned about near-term consolidation, continuing or starting an SIP remains a prudent route,' Sagar Shinde, VP Research at Fisdom told ETMutualFunds.Out of 40 flexi cap funds currently available, 29 funds have a track record of three years in the market. Out of these 29 funds, Motilal Oswal Flexi Cap Fund offered the highest return of 27.32% in the last three years, followed by JM Flexicap Fund which gave 26.74% return in the same period.
Parag Parikh Flexi Cap Fund, the largest active fund and flexi cap fund based on assets managed, has offered 23.71% return in the last three years. Samco Flexi Cap Fund gave the lowest return of 7.64% in the last three years.
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Flexi cap mutual funds have continued to dominate investors' preference by receiving the highest inflows among all equity mutual fund categories in the first half of the current calendar year. In the first half of the current calendar year, the flexi cap funds have received an inflow of Rs 31,532 crore, according to the last data declared by Association of Mutual Funds in India (AMFI). Since March 2025, these funds have continued to receive the highest inflows among all equity mutual fund categories and in the last six months, flexi cap funds have received the highest inflow in May of Rs 5,733.16 crore, the AMFI data said.Looking at the past performance and the inflow trend, according to Shinde, the outlook for flexi cap funds remains constructive and given their mandate to shift between market caps, they are well-positioned to benefit from sectoral and cyclical shifts.'As markets evolve and valuation gaps emerge across segments, skilled fund managers can take advantage of these opportunities. However, performance will depend on the manager's ability to read market signals and rebalance effectively. Over the medium to long term, flexi cap funds should continue to deliver competitive returns, especially for investors seeking diversification and active management,' he added.While mentioning that flexi cap funds are designed to offer the advantage of diversification and active management and by allowing fund managers the freedom to shift allocations across large, mid, and small-cap stocks, these funds aim to deliver better risk-adjusted returns, the expert from Anand Rathi Wealth said that according to their earnings estimates, the Nifty 50 is expected to deliver an EPS growth of around 10% for FY26. 'We expect this earnings to be reflected in price appreciation as well. Given this, we can expect flexi cap funds to deliver returns in the range of 13–15% over the coming year. Investors can consider investing in flexi cap funds, however, that should not be the sole equity component in your portfolio as they are largely tilted towards large cap stocks which can limit diversification,' Chirag said.According to the Sebi mandate, flexi cap funds should have a minimum investment in equity and equity related instruments of around 65% of total assets and these are open ended dynamic equity schemes investing across large cap, mid cap, small cap stocks.Flexi cap mutual funds offer the fund managers the freedom to invest across market capitalisations and sectors/themes. It means the fund managers can invest anywhere based on his outlook on the market.Flexi cap schemes are typically recommended to moderate investors to create wealth over a long period of time. Ideally, one should invest in these schemes with an investment horizon of five to seven years.
If you are looking for recommendations, see:
Best flexi cap mutual funds to invest in July 2025
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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