After a period of broader market correction over 6-7 months ranging from 15-25 per cent at the index level, key benchmarks have regained some of the lost momentum in the past couple of months.
Positive news on GDP growth in the fourth quarter, revival in FPI flows, low inflation and the prospect of a steady decline in interest rates over the course of this year are all positive factors at play. However, US trade tariffs, slowing global growth, AI disruptions and geopolitical tensions may bring periodical volatility.
Therefore, a flexicap approach with a tilt to large-caps would be suitable for investors with a reasonable risk appetite.
JM Flexicap (JM Multicap earlier), with a track record of over 16 years, can be a good addition to your portfolio as the fund has delivered strong and consistent performance over the past 10 years.
Taking the systematic investment plan (SIP) route with a time horizon of 7-10 years would work well while taking exposure to the fund.
Robust performance
JM Flexi Cap has been a consistently strong performer in the category over the past decade.
When five-year rolling returns over the past 12-odd years (Jan 2013-May 2025) are considered, the fund has delivered mean returns of 19.4 per cent, placing it among the top funds in the category. Over the same timeframe and aforementioned rolling return period, the scheme’s benchmark, BSE 500 TRI delivered average returns of 14.3 per cent.
In the Jan 2013- May 2025 period, on a five-year rolling basis, JM Flexicap has beaten its benchmark nearly 93 per cent of the time. It has delivered more than 15 per cent nearly 61 per cent of the time over this period and more than 12 per cent for almost 83 per cent of the time.
The fund’s SIP returns (XIRR) over the past 10 years are fairly robust at almost 20 per cent. An SIP in its benchmark BSE 500 TRI would have returned 15.8 per cent over this period.
All return figures pertain to the direct plan of JM Flexicap.
The fund has an upside capture ratio of 121.1, indicating that its NAV rises much more than the benchmark during rallies. But more importantly, it has a downside capture ratio of 84.5, suggesting that the scheme’s NAV falls much less than the BSE TRI during corrections. A score of 100 indicates that a fund performs in line with its benchmark. This inference is based on data from June 2022 to June 2025.
Blended approach
JM Flexicap spreads investments across market cap segments, true to its mandate. However, the market situation and valuations do play a role in allocation. In the aftermath of Covid-19, the fund held large-caps even to the tune of 70 per cent of the portfolio. However, with small and mid-caps taking off over the past 2-3 years (before the correction from September 2024), the fund upped stakes in these segments, going over 55 per cent in the middle of last year. However, after the correction and recent months, large-caps have gained prominence: April 2025 exposure is 58.6 per cent. Mid cand small-caps account for over 37 per cent of the portfolio.
In terms of style, JM Flexicap combines a blend of value, growth and momentum picks. Banks have always been the top holdings and this especially helped the fund over the past year. Finance companies too have tended to figure in prominence in the portfolio over the years.
It also loaded up on pharma and biotechnology stocks towards the second half of 2024, which again helped in outperformance. The fund has upped stakes in IT stocks in recent months as the correction brought valuation comfort in these companies.
Earlier, JM Flexicap was quick to latch on to the IT sector post-Covid as the segment rallied well till late 2021. The fund was quick to pare stakes from the segment subsequently as concerns of high valuations and low growth outlook arose. FMCG was another segment where the fund has reduced exposure as the segment experiences weak volume growth due to slowing rural demand.
The fund takes a diffused approach to stocks and sectors. Barring the top sector, all others account for less than 10 per cent of the portfolio, while individual stocks barring a top few account for less than 5 per cent of the overall holdings.
Overall, the fund would be suitable for those looking for healthy long-term returns with an above-average risk appetite.
Published on June 7, 2025
