The Wealth Company Flexi Cap Fund NFO: A promising fund for long term investors

The Wealth Company Mutual Fund is about to launch its NFO The Wealth Company FlexiCap Fund in late September. In this article we will delve into why Flexi Caps can be a good addition to your portfolio and how investing in the Wealth Company Flexicap NFO will give you this much needed exposure.

Why Flexicap?

• Different market cap segment has different risk / return profiles and outperform each other in different phases of market cycles (see the chart below). The advantage of Flexicap funds over other diversified equity funds is that Flexicap funds do not have any market cap specific mandate. As per AMFI August data, Flexicap funds had the largest asset under management among all diversified equity mutual funds.
  
  

  

  Source: NSE, Advisorkhoj Research, as on 31^st December 2024



• Market Cap Leadership keeps changing: See the charts below that show the returns from the different market caps over different time periods and market cycles. All-weather fund like a Flexi Cap Fund is better suited across timeframes
  
  

  

  



• There Is Enough Room to Flex: Empirical Study of Peer Flexi Cap Fund: The graphic below shows a snapshot of the average allocation in the number of flexi-cap funds between July 2022 - July 2025. Many of the Flexi Cap Funds have been large cap biased. Average allocation in mid & small caps is between 10% to 30%. Average allocation across market caps: Large Cap =58%, Mid Cap =18%, Small Cap =16%. This shows that there is still untapped opportunity in harnessing the true agility of a Flexi Cap Fund-one that dynamically navigates across large, mid, and small caps with conviction and clarity and leverages full spectrum of opportunities.
  
  

  

  Source: Wealthco MF product presentation. Calculations done taking average of quarterly market cap allocation of each fund between Jul'22 to Jul'25. The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the Scheme. Past performance may or may not be sustained in future and is not a guarantee of any future returns. Source: Ace MF

Why invest in Flexicap now?

• India is targeting a narrower fiscal deficit of 4.4% in FY 2026, with reduced Government borrowing. Inflation is cooling. Tax benefits announced in 2025 Union Budget (income up to Rs 12.75 lakhs except from income tax), rural consumption demand recovery, and front loading of Government spending in FY 2026 can lead to higher demand recovery.


• Lower crude prices and weakening dollar might provide a good base for the market recovery. Repo rate cuts by the RBI are likely aimed at providing a boost to market recovery.


• Valuations have moderated from their peaks (see the graphic below). Flexicap fund managers may find attractive long term investment opportunities at current valuations. Furthermore, the long-term India growth story is intact even in the rapidly shifting geopolitical dynamics. India remains the fastest growing emerging market economy and is expected to become the third largest economy by 2030. The India growth story will play out across all three market cap segments.
  
  

  

  Source: NSE, Advisorkhoj Research, as on 31^st August 2025



• Current market dynamics: A Flexicap strategy can be suitable in the current market conditions both from a short term and long-term perspective because a Flexicap fund manager has the flexibility to manage market cap allocation depending on his / her outlook. In times of uncertainty or volatility, the fund manager can increase large cap allocations, as large caps tend to be less volatile, and increase allocations to mid / small caps in different phases of market recovery.


• Ideal for retail investors: Diversification across different market cap segments can reduce unsystematic risks and generate more consistent returns. Flexicap Funds are ideal for investors who are not able to decide how much allocations they should have towards each market cap segments and want the fund managers to decide on market cap allocation


• Tax efficiency: Flexicap funds are also tax efficient. If an individual investor rebalanced between different investments (large, mid or small cap) then such rebalancing would attract tax liabilities for the investor. Flexicap funds are tax efficient in the sense that any rebalancing or change in market cap allocations of the fund does not attract any tax liabilities in the hands of the investor.

About The Wealth Company FlexiCap Fund

The Wealth Company FlexiCap Fund is an open-ended dynamic equity scheme that invests across large, mid, and small-cap stocks, aiming for long-term capital appreciation. The NFO opens on September 24, 2025, and closes on October 8, 2025. The fund is supported by a team of experienced professionals and a strong trustee board focussing on research-driven, performance-oriented investment strategies.

Investment Strategy and Philosophy

The fund employs a disciplined investment philosophy that emphasizes flexibility and rigorous due diligence based on the C.H.A.N.G.E framework, focusing on capable management, historical performance, attractive valuations, and governance amongst other parameters (see graphic below). The E.D.G.E overlay assesses market direction using various economic indicators. The fund managers employ scientific Investing that is data-driven and consistently monitored using quantitative filters to assess consistency, capital efficiency and resilience. Proprietary Data Engines combining fundamental factors like earnings momentum with price and volume analytics. Dynamic dashboards ensure timely portfolio interventions

Source: Wealthco MF product presentation

Stock Selection Methodology

Starting from a universe of 5500 or so listed companies, the fund managers conduct a stagewise filtration of the companies based on multiple parameters like trading history, Liquidity, Minimum market cap criteria, financial ratios, last 3/5 yrs history, and forward estimates. The optimally diversified Sector agnostic portfolio of 40-50 stocks, flexible across market caps is constructed using a bottom-up approach.

The fund managers employed a Back-tested Methodology which is a methodology for back-tested portfolio construction, and includes filtering the stocks universe on liquidity criteria, scoring on multiple qualitative and quantitative factors, and selecting the top ranked stocks within market cap ranges. See the table below that show the summary of the back tested results.

Why should you invest in The Wealth Company FlexiCap Fund?

• Experienced Leadership and Board: The Wealth Company FlexiCap Fund is supported by a team of experienced professionals and a strong trustee board. Dr. Ram Sewak Sharma and Dr. Hukum Chand Jain serve as independent directors with extensive government experience. The AMC board includes Ms. Madhu Lunawat, the first woman founder of a mutual fund in India, and other seasoned professionals. The executive team has significant experience in asset management and financial services.


• Built on a legacy of strong partners: The Wealth Company Mutual Fund is backed by Pantomath Financial Services Group and ACMIIL, India’s leading financial services conglomerate spanning across merchant banking, private equity, broking & distribution, corporate advisory and asset management and pioneering force in broking, asset management and financial innovation legacy respectively


• Performance Metrics: The fund aims for relatively better returns, lower volatility, and a higher Sharpe ratio compared to benchmarks. Last 5 years CAGR for the back-tested top 40 stocks is 33.9%, compared to 25.1% for Nifty 500 TRI. The Sharpe ratio for the back-tested portfolio is 127.7%, indicating better risk-adjusted returns.


• Rigorous due diligence process: The fund emphasizes stringent due diligence to mitigate risks and enhance investment quality. The process includes deep assessments of promoters and their business practices. It utilizes proprietary data engines for continuous monitoring and evaluation of investments. The fund aims to prevent mishaps through thorough analysis and monitoring of potential red flags.

Who should invest in The Wealth Company FlexiCap Fund NFO?

• Investors with long term investment horizon i.e., 5-7 years or more.


• Investors with a high-risk appetite who can tolerate the short-term volatility associated with equity investments.


• Investors who wish to avoid the complexities of determining allocation among large, mid, and small-cap stocks independently.

The NFO will open for subscription on 24^th September 2025 and close on 8^th October 2025.

You should consult with your financial advisor or mutual fund distributor, if The Wealth Company FlexiCap Fund is suitable for your investment needs.