The fluctuations in the market environment, such as dynamic changes in sector leadership and even business leaders change over time, which may impact your investment portfolio. These changes influence the performance of your investments and derive your portfolio returns. Hence, it is important to choose a fund with an investment approach that is flexible to adapt to ever-changing market scenarios.

Flexi-cap funds allow investors an opportunity to diversify their portfolios across market capitalization based on prevailing market conditions. Flexi-cap Funds have the flexibility to pursue opportunities across the market cap range and sectors. It offers diversification that helps generate consistent long-term outcomes while lowering risk.

Flexi-cap funds provide investors an opportunity to generate optimal returns, as the Flexi-cap strategy helps balance the risk-reward ratio. The current market conditions, with changes in economic activities that influence various market segments’ performance, make it a favourable environment to invest in Flexi-cap funds.

Invesco Mutual Fund has launched Invesco India Flexi-cap Fund; it is an open-ended dynamic equity scheme investing across large-cap, mid-cap, small-cap stocks.

On the launch of this fund, Mr. Saurabh Nanavati, Chief Executive Officer at Invesco Mutual Fund, said, “While equity markets offer the opportunity, they are often very unpredictable. Macroeconomic policies, corporate earnings, interest rates, global and domestic events have an impact on equity markets. Companies belonging to different market caps usually vary in performance over certain time periods. Therefore, diversifying your investments across market caps, preferably through a Flexi-cap Fund, can reduce portfolio risk and mitigate volatility, thereby maximizing portfolio returns over the long term. The Invesco India Flexi Cap Fund offers the necessary expertise and flexibility to navigate through market movements with an aim to capture opportunities across large, mid, and small-cap stocks and help build long-term wealth.”

Table 1: Details of Invesco India Flexi-cap Fund

Type An open-ended dynamic equity scheme investing across large-cap, mid-cap, small-cap stocks. Category Flexi cap Fund
Investment Objective To generate capital appreciation by dynamically investing in a mix of equity and equity related instruments across market capitalization, i.e., large, mid, and small-cap stocks. However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved, and the Scheme does not assure or guarantee any returns.
Min. Investment Rs 1,000/- and in multiples of Re 1 thereafter. Additional Purchase Rs 1,000/- and in multiples of Re 1 thereafter. Face Value Rs 10/- per unit
SIP/SWP/STP Available
  • Direct
  • Regular
  • Growth
  • Income Distribution Cum Capital Withdrawal (IDCW)
Entry Load Not Applicable Exit Load If units are redeemed / switched out within 1 year from the date of allotment:
  • – If up to 10% of units allotted are redeemed/switched out – Nil
  • – any redemption / switch-out of units in excess of 10% of units allotted – 1%.
If units are redeemed/switched out after 1 year from the date of allotment, no exit load is payable.
  • – In case of each purchase of units through IDCW Transfer Plan: an exit load of 1% is payable if units are redeemed/ switched-out on or before 1 year from the date of allotment.
  • – no exit load is payable if units are redeemed/ switched-out after 1 year from the date of allotment.
Switch between the Plans under the Scheme: Nil
Fund Manager
  • Mr Taher Badshah
  • Mr Amit Nigam
Benchmark Index S&P BSE 500 TRI
Issue Opens: January 24, 2022 Issue Closes: February 07, 2022

(Source: Scheme Information Document

The investment strategy for Invesco India Flexi-cap Fund will be as follows:

Invesco India Flexi-cap Fund will invest in equity and equity-related securities of large, mid, and small companies. The scheme will endeavour to invest in high-growth and high-quality companies and companies exhibiting a turnaround.

The scheme will adopt a mix of a top-down and bottom-up approach to identify the stock opportunities across the market capitalization. The scheme will follow style neutral strategy and will be sector agnostic. The stock selection will be guided by an in-house proprietary model, investment philosophy, and proprietary stock categorization framework. Allocation between large, mid, and small-cap stocks will be based on relative valuations, business cycles, and other macroeconomic indicators.

There will be no particular bias towards any market cap size or any sector. A small portion of the scheme may be invested in debt & money market instruments, units issued by REITs, and InvITs.The scheme may also invest a certain portion of its corpus in foreign securities.

Under normal circumstances, the Asset Allocation will be as under:

Table 2: Asset Allocation for Invesco India Flexi-cap Fund

Instruments Indicative Allocation (% of net assets) Risk Profile
Minimum Maximum High/Medium/Low
Equity & equity related instruments of largecap, midcap and smallcap companies 65 100 High
Debt & Money Market Instruments 0 35 Low to Medium
Units issued by REITs and InvITs 0 10 Medium to High

(Source: Scheme Information Document

Effective risk management is critical to fund management for achieving financial soundness. Investments by the scheme shall be made as per the scheme’s investment objectives and provisions of SEBI regulations.

Who will manage Invesco India Flexi-cap Fund?

Mr. Taher Badshah, Mr. Amit Nigam, and Mr. Neelesh Dhamnaskar (for foreign securities) will be the designated fund managers for this scheme.

Mr. Taher Badshah holds BE (Electronics) degree and MMS (Finance) from Mumbai University. He has more than 26 years of experience in the Financial Services industry. Prior to joining Invesco Mutual Fund, he worked with Motilal Oswal Asset Management Company Ltd. as Senior Vice President and Head of Equities.

At Invesco AMC, Mr. Badshah currently manages Invesco India Growth Opportunities FundInvesco India Smallcap FundInvesco India Dynamic Equity FundInvesco India Contra FundInvesco India Focused 20 Equity FundInvesco India Equity & Bond Fund, and Invesco India ESG Equity Fund.

Mr. Amit Nigam holds B.E. (Mechanical) degree and PGDM; he has more than 20 years of experience in the Indian equity markets. Before joining Invesco Mutual Fund, he was associated with Essel Finance AMC Ltd. as Head of Equities and BNP Paribas Asset Management India Pvt. Ltd. as Fund Manager.

At Invesco AMC, Mr. Nigam currently manages Invesco India ESG Equity FundInvesco India Multicap FundInvesco India Infrastructure FundInvesco India Largecap FundInvesco India Tax Plan, and Invesco India Equity Savings Fund

Mr. Neelesh Dhamnaskar is a Commerce Graduate and MMS (Finance). He has around 14 years of experience in equity research. Prior to Invesco Mutual Fund, he has worked with ENAM Securities Direct Pvt. Ltd., KR Choksey Shares, and Securities Pvt. Ltd. as an Equity Research Analyst and Anand Rathi Securities Ltd. Commodities Research Analyst.

At Invesco AMC, Mr. Dhamnaskar focuses on investment in foreign securities. Currently, he manages Invesco India Feeder – Invesco Pan European Equity FundInvesco India Feeder – Invesco Global Equity Income FundInvesco India – Invesco Global Consumer Trends Fund of FundInvesco India Infrastructure Fund, and Invesco India Midcap Fund.

Fund Outlook – Invesco India Flexi-cap Fund

Invesco India Flexi-cap Fund aims to build a portfolio that invests dynamically in a mix of equity and equity-related instruments across market capitalization. It provides investors with diversification by investing in different market segments and benefit from the emerging opportunities.

This scheme offers flexibility to fund managers to actively manage the holdings and monitor individual stock positions based on market capitalization. The scheme endeavours to capture stability of large-cap and growth potential of mid & small- cap with an option to dynamically change the allocation.

Although the scheme may offer the diversification, and investors may benefit from the flexibility to shift allocation across market caps in various market cycles, it is not immune to risks. If the fund manager increases the exposure to mid and small-cap stocks, which are considered highly risky, the portfolio may witness higher volatility. The scheme being actively managed, the fund manager’s ability to construct the Flexi Cap portfolio remains to be seen.

In addition, the looming threat of the Delta plus the Omicron variant and the announcement of tightening of monetary policy by the US federal reserve pose a major risk to economic growth. The margin of safety appears to be narrow, and the clear direction for the equity market from the current elevated levels is unknown. These, among many other factors, may affect the scheme’s performance, and the portfolio may face higher volatility in the near term.

Thus, this Flexi-cap scheme is suitable only for high-risk investors who can stomach the market volatility with a long investment horizon of at least 5-7 years. Ensure that your investment objectives align with the fund.

This article first appeared on PersonalFN here

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