Sandeep Gupta
India’s potential for long-term wealth creation through equities is beyond question. With a steadily rising per capita income-now around $3,000-and one of the world’s largest young populations, the country stands at the cusp of a sustained consumption and infrastructure boom. These structural strengths create a fertile ground for corporate earnings to multiply, potentially propelling India’s equity market capitalization toward the $10 trillion mark in the years ahead.
However, the journey toward long-term growth is seldom linear. Periodic bouts of volatility, policy shifts, or global headwinds often test investors’ conviction and may even deter participation due to short-term value erosion. For those who wish to harness the long-term potential of equities while navigating market fluctuations, Flexicap funds offer an effective route.
Flexicap funds invest across the entire market capitalization spectrum-large-cap, mid-cap and small-cap-based on relative valuations and market conditions. Think of a Flexicap fund manager as a national cricket team selector, choosing players depending on the game format. Just as the selection for a Test match differs from that for a T20, fund managers dynamically adjust allocations based on prevailing opportunities and risks.
During uncertain or volatile phases, the portfolio leans toward large-cap companies, as they possess resilient balance-sheets, stronger cash-flows and the ability to withstand macroeconomic shocks. Conversely, during economic upcycles, fund managers may raise exposure to mid-cap and small-cap stocks, to capture the sharper earnings momentum that accompanies expansionary phases.
Large-cap exposure is generally driven by a top-down macroeconomic approach, while mid-cap and small-cap selections rely on bottom-up stock picking. This balanced framework enables Flexicap funds to act as steady compounders over the long term-offering growth potential with moderated risk compared to pure mid-cap or small-cap strategies.
In line with this, investors who wish to invest in Flexicap funds may consider the ICICI Prudential Flexicap Fund. Given the dynamic nature of the scheme in navigating across market capitalizations, the fund has the potential to deliver a good investment experience across market cycles. In terms of returns, the fund has delivered a 19.01% CAGR over three years and a 17.32% CAGR since inception in July 2021, as on October 31, 2025.
(The writer is JK Mutual Fund Services, J&K)