Flexi cap vs multi cap funds: the difference that matters
Aeterna Wealth · figures from our fund data, updated 12 Nov 2026
A multi cap fund must keep at least 25% each in large, mid and small companies, so it always has a sizeable small-cap share: the median multi cap fund holds about 29% in small caps. A flexi cap fund can hold any mix and usually leans to large companies: the median holds about 17% in small caps. Choose multi cap for a fixed spread across sizes and more small-cap risk; flexi cap for a manager who can move between sizes, usually with less risk.
The SEBI rules
- Multi cap: at least 75% in equity, with at least 25% each in large caps (top 100), mid caps (101 to 250) and small caps (beyond 250).
- Flexi cap: at least 65% in equity, in any proportion of large, mid and small caps.
What they actually hold
- Median flexi cap fund: about 56% large, 20% mid, 17% small caps (ranging from 3% to 44% in small caps).
- Median multi cap fund: about 37% large, 26% mid, 29% small caps.
- Our figures use each fund's latest monthly portfolio and AMFI's list of company sizes; the remainder is cash, foreign shares or companies not on the list.
How they have behaved
- Flexi cap: 20 of 36 Regular plans beat the Nifty 500 total-return index over 3 years; median deepest fall in that time 18.8%.
- Multi cap: 17 of 23 beat the Nifty 500 Multicap 50:25:25 index; median deepest fall 20.3%.
- Each is measured against its own index, so compare funds within a category rather than across the two.
Which to choose
- You want one fund to cover all company sizes, with steady small-cap exposure: multi cap.
- You want the manager to decide, and usually a gentler ride: flexi cap.
- If you already own a small cap fund, a multi cap adds more of the same small-cap risk; a flexi cap overlaps less.
- Holding both is reasonable only if their portfolios overlap less than about half.
Common questions
Is multi cap riskier than flexi cap?
Usually, because it must hold at least 25% in small caps, which fall harder in bad markets.
Can a flexi cap fund hold only large caps?
Yes; SEBI sets no minimum for any company size, only for equity as a whole.
Which index are they compared with?
Flexi cap with the Nifty 500 total-return index; multi cap with the Nifty 500 Multicap 50:25:25 index, which keeps the same 25% small-cap floor.
Want this worked out for your money?
A first conversation is free. We reply within one working day.
More guides
- Regular vs Direct mutual funds: what a Regular plan gives you
- How to choose a mutual fund: a six-step check
- SIP or lump sum? What the data says
- Mutual fund overlap: why owning six funds can mean owning one
- Tax on mutual fund gains in 2025-26: LTCG, STCG and how to save
- PMS vs mutual funds: costs, tax and who each suits
- Active funds vs index funds in India: when active funds earn their place
- The 4% rule in India: how big a corpus lasts for life
- ELSS funds: the tax saving, the 3-year lock-in, and who they still suit
- Exit loads on mutual funds: what they are and how to avoid paying them
- When to sell a mutual fund, and when not to
- How many mutual funds should you own?
- Expense ratio: what it is, and why returns after it are what count
- NAV in mutual funds: why a ₹10 fund is not cheaper than a ₹500 fund
- Rolling returns: the fairest way to judge a mutual fund
- TRI: why funds must be compared with the total return index
- CAGR vs XIRR vs absolute return: which number to use
- Volatility and the Sharpe ratio: how bumpy, and was it worth it?
- Downside capture: how much of the market's fall a fund takes
- Maximum drawdown: the worst fall you would have sat through
- Active share: is your fund really active?
- STP and SWP: moving money in, and taking an income out
General information, not investment or tax advice for your situation. Mutual fund investments are subject to market risks; read all scheme-related documents carefully. Past performance does not guarantee future returns.
Send us your CAS and get a written report: which of your funds to keep, which to exit and when, where new SIPs should go, and what each change costs in tax.