Multi-asset or flexi-cap options offer better returns? Check out this comparison before investing
While there are many categories of mutual funds available for investment, each has its own advantages and disadvantages. However, in this article, we will explain in detail about multi-asset funds and flexi-cap funds.
The way global tensions have dominated the equity market over the past few months has significantly dented market sentiment. The market has seen significant volatility since Trump came to power.
In this context, many experts consider investing in mutual funds safer and more profitable than investing in stocks. Data also shows that the number of demat accounts is rapidly increasing.
Investing through SIPs has simplified and made the process of investing in mutual funds easier. This raises the question of which of the many fund options available in the market is best for you. To answer this question, we're going to explain in detail two major categories of funds in the market: multi-asset and flexi-cap.
Multi-Asset Funds
Multi-asset funds are funds that invest in three or more asset classes, such as equity, debt, and gold. Combining stocks, bonds, and gold in a single fund distributes risk.
If the stock market falls, gold or debt offsets this, protecting investors from significant losses. These funds' short-term returns have ranged from -0.78 percent to +0.46 percent.
This reflects normal fluctuations, but over three- and six-month periods, many funds have delivered returns of 8 to 11 percent.
Multi-Asset Funds Return Flexi/Focused Funds Return
1 Kotak Multi Asset Omni FoF Direct 2.28% SBI Focused Fund Direct 4.21%
2 UTI Multi Asset Allocation Fund Direct 2.22% Old Bridge Focused Fund Direct 4.16%
3 ICICI Prudential Passive Multi-Asset FoF Direct 2.09% Aditya Birla Sun Life Focused Fund Direct 3.94%
Flexi-Cap Fund
While flexi-cap funds invest solely in equities, the fund manager has complete freedom to vary the desired ratio between large, mid- and small-cap companies.
The market was quite volatile in 2025, falling by around 8 percent in the middle of the year, but despite this, most large flexi-cap funds outperformed the Nifty 500 TRI.
Over the past year, 8 out of 10 large flexi-cap funds delivered returns ranging from 10 percent to 13 percent, while the benchmark delivered only around 8 percent.
6-month returns
Multi-Asset Funds Return Flexi/Focused Funds Return
1 Kotak Multi Asset Allocation Fund Direct 16.21% LIC MF Flexi Cap Fund Direct 15.14%
2 HSBC Multi Asset Allocation Fund Direct 14.57% Helios Flexi Cap Fund Direct 13.78%
3 DSP Multi Asset Allocation Fund Direct 13.65% ICICI Pru Retirement Fund Pure Equity 13.29%