Top 7 Diversified Flexi Cap Mutual Funds in 2015: Part 1

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Flexi Cap funds, as the name suggests, are diversified equity funds which invest in stocks across different market capitalizations. The flexible mandate of these funds enable fund managers to spot opportunities across market segments. Flexi Cap funds or multi cap funds combine the best features of large cap and midcap funds. The large cap holdings of the flexi cap funds provide a certain degree of stability in volatile markets, while the small and midcap holdings enhance the returns in bull markets. As such, investment experts advise investors to allocate a significant portion of their mutual fund portfolio to Flexi Cap funds. In this 2 part blog we will review top 7 flexi cap funds based on CRISIL’s mutual fund ranking and Morningstar ratings. Each of the 7 funds in our selection has been ranked either 1 or 2 by CRISIL. Also Morningstar has rated each of these funds either as a 4 star or 5 star fund. The table below shows the top 7 flexi cap funds from our selection.

Diversified Equity Funds - Top 7 flexi cap funds

We can see that all these funds have given exceptionally good returns on a compounded annual basis over the last 3 year period. Let us review each of these funds briefly to see how these funds across market cycles and the returns investors would have received by investing through lump sum and SIP modes.

UTI MNC Fund

This is a well known fund from the UTI stable, with over र 1,000 crores of assets under management. The expense ratio of the fund is 2.8%. The volatility of the fund is on the lower side relative to diversified equity funds in general. The chart below shows the trailing returns of the UTI MNC fund over 1, 3, 5 and 10 year period.

Diversified Equity Funds - the trailing returns of the UTI MNC Fund over 1, 3, 5 and 10 year period

To get a sense of how this fund has performed across different market cycles, we have compared the annual returns of the fund with CNX 500 index from 2007 to 2014.

Diversified Equity Funds - Comparison of annualized returns of UTI MNC fund with CNX 500

The chart below shows growth of र 10,000 lump sum investment in UTI MNC fund over the last 5 years. र 10,000 invested in the UTI MNC fund five years back would have grown to almost र 29,000 (as on 11/5/2015).

Diversified Equity Funds - Growth of Rs. 10,000 lump sum investment in UTI MNC Fund over the last 5 years

The chart below shows the returns of र 3,000 SIP in the UTI MNC fund started 5 years back. The SIP date is assumed to be the first working day of the month.

Diversified Equity Funds - Growth of Rs. 3000 SIP in UTI MNC Fund over the last 5 years

The total value of the SIP investment as on 11/5/2015 was र 3.63 lacs while the investors would have invested only र 1.8 lacs.

Franklin India High Growth Companies Fund

This is another well known fund from the Franklin Templeton stable, with over र 2,200 crores of assets under management. The expense ratio of the fund is 2.6%. The volatility of the fund is in line with the volatilities of diversified equity funds in general. However, the risk adjusted return is quite outstanding. The chart below shows the trailing returns of the fund over 1, 3 and 5 year periods.

Diversified Equity Funds - the trailing returns of the Franklin India High Growth Companies Fund over 1, 3 and 5 year period

The chart below shows the annual returns of the Franklin India High Growth Companies fund over different market cycles from 2007 to 2014.

Diversified Equity Funds - Comparison of annualized returns of Franklin India High Growth Companies Fund with CNX 500

The chart below shows growth of र 10,000 lump sum investment in Franklin India High Growth Companies fund over the last 5 years. र 10,000 invested in the Franklin India High Growth Companies fund five years back would have grown to over र 26,000 (as on 11/5/2015).

Diversified Equity Funds - Growth of Rs. 10,000 lump sum investment in Franklin India High Growth Companies Fund over the last 5 years

The chart below shows the returns of र 3,000 monthly SIP in the Franklin India High Growth Companies Fund started 5 years back. The SIP date is assumed to be the first working day of the month.

Diversified Equity Funds - Growth of Rs. 3000 SIP in Franklin India High Growth Companies Fund over the last 5 years

The total value of the SIP investment as on 11/5/2015 was र 3.6 lacs while the investors would have invested only र 1.8 lacs.

Reliance Equity Opportunities

This is another old favourite with investors from the Reliance stable, with over र 11,000 crores of assets under management. You can read our review of Reliance opportunities fund by going to Strong SIP performance over the last 10 years from this consistent diversified fund. The expense ratio of the fund is 2.3%. The volatility of the fund is in line with the volatilities diversified equity funds in general. However, the risk adjusted return is quite outstanding. The chart below shows the trailing returns of the fund over 1, 3, 5 and 10 year periods.

Diversified Equity Funds - the trailing returns of the Reliance Equity Opportunities Fund over 1, 3, 5 and 10 year period

The chart below shows the annual returns of the Reliance Equity Opportunities fund over different market cycles from 2007 to 2014.

Diversified Equity Funds - Comparison of annualized returns of Reliance Equity Opportunities Fund with CNX 500

The chart below shows growth of र 10,000 lump sum investment in Reliance Equity Opportunities fund over the last 5 years. र 10,000 invested in the Reliance Equity Opportunities Fund five years back would have grown to almost र 23,000 (as on 11/5/2015).

Diversified Equity Funds - Growth of Rs. 10,000 lump sum investment in Reliance Equity Opportunities Fund over the last 5 years

The chart below shows the returns of र 3,000 monthly SIP in the Reliance Equity Opportunities Fund started 5 years back. The SIP date is assumed to be the first working day of the month.

Diversified Equity Funds - Growth of Rs. 3000 SIP in Reliance Equity Opportunities Fund over the last 5 years