Flexi-Cap Fund
What Is a Flexi-Cap Fund?
A flexi-cap fund is a type of mutual fund that isn't restricted to investing in companies with a foreordained market capitalization. This type of fund structure will be indicated in the fund's prospectus. A flexi-cap fund can give the fund manager greater investment decisions and diversification prospects.
How a Flexi-Cap Fund Works
Not at all like different funds, for example, mid-cap or small-cap funds, the size of a company isn't a constraint for flexi-cap funds. A flexi-cap fund might invest in any company, no matter what the company's size.
Types of Companies by Market Cap
Market capitalization is quite possibly of the most common way mutual funds select companies in which to invest. Market capitalization alludes to the total dollar market value of a company's outstanding shares. Market capitalization is commonly alluded to as "market cap." Market cap is calculated by duplicating a company's shares outstanding by the current market price of one share.
Utilizing market capitalization to show the size of a company is important on the grounds that company size is a fundamental determinant of different qualities wherein investors are intrigued (counting risk).
- Large-cap companies typically have a market capitalization of $10 at least billion. These large companies have usually been around for quite a while, and they are major parts in deep rooted industries. Investing in large-cap companies doesn't be guaranteed to get gigantic returns in a short period of time. Be that as it may, long term, these companies generally reward investors with a consistent increase in share value and dividend payments.
- Mid-cap companies generally have a market capitalization of between $2 billion and $10 billion. Mid-cap companies are currently extending. They carry an intrinsically higher risk than large-cap companies since they are not as laid out, however they are attractive for their growth potential.
- Small-cap companies have a market capitalization of between $300 million to $2 billion. These small companies could be youthful in age and additionally they could serve niche markets and new industries. These companies are considered higher risk investments due to their age, the markets they serve, and their size. Smaller companies with less resources are more sensitive to economic lulls.
Illustration of a Flexi-Cap Fund
The Fidelity Stock Selector All-Cap Fund is a diversified domestic equity strategy that invests comprehensively across all sectors, market capitalizations, and styles. The fund is managed by a member of Fidelity's Global Asset Allocation division and a team of sector portfolio managers. Portfolio sector weightings are kept like those of its benchmark with an end goal to add value through active stock selection and furthermore to limit the risks associated with sector or market timing.
The fund had a 10-year annualized return of 14.51% as of August 31, 2020, compared with 14.88% for its U.S. large growth benchmark. Its 10 largest holdings, which made up 25.46% of the fund, were:
- Microsoft Corp. (MSFT)
- Apple Inc. (AAPL)
- Alphabet Inc CL A. (GOOGL)
- Amazon.com Inc. (AMZN)
- Meta Platforms Inc. (formerly Facebook) Class A (META)
- Adobe Inc. (ADBE)
- United Health Group Inc. (UNH)
- Delegate and Gamble Co. (PG)
- Salesforce.com Inc. (CRM)
- Roche Holdings AG
Features
- Dissimilar to different funds, for example, mid-cap or small-cap funds, the size of a company isn't a constraint for flexi-cap funds.
- A flexi-cap fund might invest in any company, no matter what the company's size.
- A flexi-cap fund is a type of mutual fund that isn't restricted to investing in companies with a foreordained market capitalization.
- A flexi-cap fund can give the fund manager greater investment decisions and diversification prospects.
