Check if your Multicap Fund is a Flexi cap Fund now


In September 2020, The Securities and Exchange Board of India (SEBI) changed the fundamental attributes of a multi cap fund.

On concerns raised by various stakeholders, SEBI introduced a new category called flexi cap mutual fund.

The concerns were genuine and warranted since according to the new rules, a multi cap fund would need to be 50% invested in mid and small cap stocks which would make it aggressive compared to previous rules.

For existing multi cap funds, they were given the option to either convert their fund to a flexi cap fund or to remain as a multi cap fund.

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What is a flexi cap fund?

A flexi cap fund is a mutual fund that needs to be invested in equities for a minimum of 65% at all times.

The remaining 35% can be invested in either debt, international equity, cash or any caps or all.

It can go up to any number till 100% but it cannot go under 65% because for a mutual fund to qualify as an equity fund for tax purposes it needs to invest a minimum of 65% into equities, except for elss/tax saving mutual funds.

There is no restriction with caps in a flexi cap fund.

The fund manager has a free hand to move across sectors and caps.

Basically, a flexi cap fund will now be run exactly like how a multi cap fund was earlier, the only change is in the name.


List of Multicap funds that have converted to Flexi cap fund

Aditya Birla Sun Life Equity

Axis Multicap

BOI AXA Multicap

Canara Robeco Equity Diversified

DSP Equity

Edelweiss Multicap

Franklin India Equity

HDFC Equity

HSBC Multicap

IDBI Diversified Equity

IDFC Multicap

JM Multicap

Kotak Standard Multicap

L&T Equity

LIC MF Multicap

Motilal Oswal Multicap 35

PGIM India Diversified Equity

Parag Parikh Long Term Equity

Shriram Multicap

Taurus Starshare

Union Multicap

UTI Equity


Additional reading: Click Here to read about the various types of equity mutual funds 

What happens if your multi cap turns into a flexi cap fund?

In case your multi cap gets converted into a flexi cap fund then as explained above, there will not be any fundamental changes to your fund except for name change.

A flexi cap fund will still function as how a multi cap was previously functioning, the only change is in name.


Additional reading: Click Here to read our complete report on ELSS funds and how they work

What is a multi cap mutual fund?

A multi cap mutual fund needs to invest:

  1. Minimum 25% in large cap stocks
  2. Minimum 25% in mid cap stocks
  3. Minimum 25% in small cap stocks

The remaining 25% can be invested in either debt, international equity, cash or any of the above caps or all.

For a scheme to qualify as a flexi cap mutual fund, a mutual fund needs to invest a minimum of 75% in domestic equity divided as explained above.



Multi cap mutual funds list

List of Multicap funds as on 1st March 2021

Baroda Multicap

BNP Paribas Multicap

ICICI Pru Multicap

Invesco Multicap

ITI Multicap

Mahindra Manulife Multicap

Nippon Multicap

Principal Multicap

Quant Active Multicap

Sundaram Equity Multicap


What happens if your multi cap remains a multi cap fund?

In such a scenario your multi cap fund would be slightly more aggressive.

The word ‘slightly’ has been mentioned because all past multi cap funds were run differently from each other.

Some were more aggressive than others, there was no set rule.

In such a scenario you would need to be aware how your past multi cap was functioning because this would help you understand whether your risk appetite would suit the new attributes of a multi cap fund.

In case you have a higher risk appetite then this would not make any difference, if not then you would need to make a decision based on other factors.

Of course this would only make sense if you actually undertook a risk appetite review. 


Are you investing in the right mutual funds?

What should you do if you are currently invested in a multicap fund?

If you are currently invested in a multicap mutual fund then you need to first note what direction your multicap fund is going to take.


It would either stick with being a multicap fund or be converted to a flexi cap mutual fund.


You would need to decide if you want to invest in a flexi cap mutual fund (in new mandate) or multicap mutual fund (in old mandate).


In case your current multicap mutual fund decides to convert itself into a flexi cap mutual fund, it would provide you a period of 1 month within which you can redeem your investments without attracting any exit load.


You would need the consider the following points, no matter your decision:

  1. Your tax structure, if any.
  2. Your overall portfolio structure.
  3. Your risk appetite
  4. Your goals and
  5. Your time horizon among other things.

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Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.  
Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing

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