Flexi-Cap Funds Grow Amid Market Changes; Industry Awaits Regulatory Clarity

Flexi-cap mutual funds in India have seen significant growth, with assets under management rising 148% to Rs 5.52 lakh crore by December 2025, driven by their flexible investment across large-, mid-, and small-cap stocks. Investors favor these funds for diversification and resilience in volatile markets. Meanwhile, the mutual fund industry awaits regulatory clarity on mid- and small-cap classifications amid evolving market caps. New fund launches, such as Samco's momentum-based mid-cap fund, reflect ongoing innovation. Conservative hybrid and ELSS tax-saving funds remain popular for risk-averse and tax-conscious investors. Some newer fund houses face challenges scaling despite strong distribution networks. Experts advise long-term, disciplined investing over market timing amid geopolitical uncertainties.