UTI Flexi Cap Fund: Going strong for 33 years

Picture courtesy - Freepik

UTI Flexi Cap Fund has been in existence for over 33 years now. This diversified equity fund, formerly known as UTI Equity Fund, invests across market capitalization segments. The fund has a strong track record of wealth creation and alpha generation. If you had invested Rs 1 lakh in the fund at the time of its launch your investment would have multiplied nearly 49X, outperforming its benchmark index (see the chart below). In this article, we will review UTI Flexi Cap Fund.

Current market context

The equity market rebounded after being under pressure for several months due to US tariffs. The GST structure rationalization brought cheer to the market. Clarification on whether generic drug imports would be subject to tariffs in the US also brought relief. The GST cut is expected to boost consumption. Early reports suggest that automobile sector saw a big jump in sales post GST rationalization. Growth in consumer demand in the upcoming festive season may provide further boost to the market. Valuations have moderated from peaks across market cap segments (see the chart below).

Mutual Fund - Valuations have moderated from peaks across market cap segments (see the chart below).

Source: National Stock Exchange, Advisorkhoj Research as on 30^th September 2025

Why flexicap?

Winners rotate across market cap segments (see the chart below). While midcaps and small caps outperform in bull market phases, large caps provide stability in volatile markets. Flexicap fund managers enjoy the flexibility of managing allocations across market cap segments without any market cap specific constraints i.e., change market cap allocations in line with their outlook for the market to generate alphas in the long term and manage risks in the short term.

Mutual Fund - While midcaps and small caps outperform in bull market phases, large caps provide stability in volatile markets

Source: National Stock Exchange, Advisorkhoj Research as on 30^th September 2025

Though valuations have moderated, there are concerns about valuations in pockets of mid and small cap segments, while large caps are at relatively reasonable valuations (see the chart below). In current market conditions, flexicap strategy may be suitable since fund managers would have the flexibility to manage their portfolios as per changing market dynamics and valuation scenarios.

Mutual Fund - There are concerns about valuations in pockets of mid and small cap segments, while large caps are at relatively reasonable valuations (see the chart below)

Source: National Stock Exchange, Advisorkhoj Research as on 30^th September 2025

UTI Flexi Cap Fund- Outperformance against benchmark

The fund follows a "Quality-Growth" philosophy, investing in businesses with strong fundamentals with sustainable growth. It maintains a diversified exposure across market capitalizations, with about 30-40% in small- and mid-cap stocks and the rest in large caps.

The fund has experienced several investment cycles since its inception. The chart below shows the 5 year rolling returns of the fund over the last 20 years. You can see that the fund outperformed the benchmark over sufficiently long investment tenures across different market conditions most of the time.

Mutual Fund - The chart below shows the 5 year rolling returns of the fund over the last 20 years

Source: National Stock Exchange, Advisorkhoj Research as on 9^th October

The table below shows the average, median, maximum and minimum rolling returns of the fund versus the benchmark index for different investment tenures since the inception of the fund. You can see the average rolling returns of the fund across different tenures were higher than that of the benchmark. At the same time, the minimum rolling returns of the fund were higher than that of the benchmark. In other words, the fund provided better risk/return trade-off relative to its benchmark.

Mutual Fund - You can see the average rolling returns of the fund across different tenures were higher than that of the benchmark

Source: National Stock Exchange, Advisorkhoj Research as on 9^th October

The table below shows the rolling returns distribution of the fund versus the benchmark index for different investment tenures over the last 20 years. You can see that over 3 year and 5 year investment tenures, the fund was able to provide superior downside risk limitation relative to the benchmark index. At the same time, over 5 year plus investment tenures the percentage instances of 12%+ CAGR returns of the fund was significantly higher than that of the benchmark. This again shows that the fund provided superior risk/return trade-off relative to benchmark.

Mutual Fund - The table below shows the rolling returns distribution of the fund versus the benchmark index for different investment tenures over the last 20 years

Source: National Stock Exchange, Advisorkhoj Research as on 9^th October

Wealth creation through SIP

The chart below shows the growth of Rs 10,000 monthly SIP in UTI Flexi Cap Fund over the last 20 years. With a cumulative investment of only Rs 24.3 lakhs you could have accumulated a corpus of Rs 1.15 crores matching benchmark SIP returns.

Mutual Fund - The chart below shows the growth of Rs 10,000 monthly SIP in UTI Flexi Cap Fund over the last 20 years

Source: Advisorkhoj Research as on 10^th October 2025

Strong SIP performance across market conditions

The chart below shows the rolling 10 year SIP XIRR of the UTI Flexi Cap Fund over the last 20 years. You can see that the fund almost always (97% of the instances) gave double digit SIP returns (XIRR). This shows the importance of discipline. Irrespective of market movements, you should remain disciplined in your SIPs in UTI Flexi Cap Fund.

Mutual Fund - The chart below shows the rolling 10 year SIP XIRR of the UTI Flexi Cap Fund over the last 20 years

Source: Advisorkhoj Research as on 10^th October 2025

The table below shows the SIP rolling XIRR distribution of UTI Flexi Cap Fund versus the benchmark index for different SIP tenures since the inception of the scheme. You can see that over 7 years plus SIP tenure the fund never gave negative returns. You can also see that percentage instances of 12%+ SIP XIRR is significantly higher for the fund versus the benchmark index over 5 year plus SIP tenures.

Mutual Fund - You can see that over 7 years plus SIP tenure the fund never gave negative returns

Source: National Stock Exchange, Advisorkhoj Research as on 9^th October. *Total Return Index

Downside risk limitation

The fund has gone through severe bear markets and deep corrections e.g., 2008 Global Financial Crisis, COVID-19 pandemic, US debt ceiling crisis in 2011, Eurozone debt crisis, China slowdown, Russia Ukraine war and more recently FII sell-off & Trump tariffs. You can see in the chart below that UTI Flexi Cap Fund was able to provide superior downside risk limitation relative the benchmark index. The maximum drawdown of the fund since inception was - 52% versus -64% for the benchmark index.

Mutual Fund - You can see in the chart below that UTI Flexi Cap Fund was able to provide superior downside risk limitation relative the benchmark index

Source: Advisorkhoj Research as on 10^th October 2025

Even if we look at the drawdowns over the past one year, a very volatile period for the market, you will see that fund was able to provide superior downside risk limitation versus the benchmark index. The maximum drawdown of the fund since 1^st September 2024 was -16% versus -19% for the benchmark index.

Mutual Fund - You will see that fund was able to provide superior downside risk limitation versus the benchmark index