Multi-Cap Funds Beat Flexi-Caps Across Several Periods, but Flexi-Caps Draw Higher Inflows

Key Takeaways

• Multi-cap funds returned an average 12.95% over six months, compared with 9.31% for flexi-cap funds.
• Over three and five years, multi-cap category returns were also ahead of flexi-caps in the ET Mutual Funds dataset.
• Despite the return gap, flexi-cap schemes received ₹5,059 crore of inflows in August compared with ₹3,733 crore for multi-caps.

Multi-cap mutual funds have outpaced flexi-cap schemes across several trailing return periods, although investor flows continue to favour flexi-cap funds.

An ET Mutual Funds analysis showed that multi-cap schemes delivered an average 12.95% return over six months, compared with 9.31% for flexi-cap schemes.

The gap was also visible over longer periods.

Over three years, multi-cap funds returned an average 12.15%, while flexi-cap schemes delivered 10%.

Five-year returns stood at 11.69% for multi-caps and 9.23% for flexi-caps.

Shorter periods also show divergence

Over one year, multi-cap funds returned an average 2.96% while the flexi-cap category declined 0.83%, according to the analysis.

Both categories were negative over the preceding three months, but multi-cap funds declined 1.63%, compared with a 2.61% fall for flexi-caps.

Over two years, multi-cap funds were down 1.25%, against a 3.04% decline for flexi-cap schemes.

These are category-average trailing returns rather than returns from every individual scheme. Performance within each category can vary widely.

Investor flows favour flexi-cap schemes

The return rankings did not translate into higher investor flows for multi-cap funds.

According to AMFI's August 2026 data cited in the report, flexi-cap schemes received ₹5,059 crore of net inflows during the month.

Multi-cap funds attracted ₹3,733 crore.

The two categories differ in their portfolio requirements.

Multi-cap funds are required to maintain specified minimum exposure across large-, mid- and small-cap stocks. Flexi-cap funds have greater freedom to shift allocations between market-cap segments without maintaining the same mandated split.

That structural difference can produce different return and risk patterns as leadership changes between large-, mid- and small-cap equities.

The recent numbers describe historical category performance and investor flows. They do not establish that either category will outperform the other in future periods.