JM Flexi Cap Fund: Rewarding Investors with Robust Returns

Launched in September 2008, JM Flexi Cap Fund aims to invest dynamically across stocks and sectors. Being a Flexi Cap Fund, the fund has the flexibility to invest across market caps without any restrictions. The fund was earlier known as JM Multi Cap Fund and usually maintained a large-cap dominated portfolio in which it allocated over 85% of its assets, allocating only a minor portion in mid and small-cap stocks. However, after SEBI introduced the Flexi Cap Fund category in 2020, the fund underwent recategorisation. Under its new flexi-cap mandate, JM Flexi Cap Fund has significantly pared its large-cap stake while simultaneously increasing exposure in lower market caps (it has ranged between 35-60% in the last one year). Accordingly, the past performance of the fund is not directly comparable.

The significant exposure to stocks in the lower market caps has enabled it to benefit from the stellar rally in the broader market over the last couple of years. Moreover, it carries a high turnover ratio compared to peers, indicating a momentum-driven approach. This strategy has worked well in recent years. A momentum-based strategy involves picking stocks that are on a rising trend, in anticipation of the trend continuing in the future as well, while at the same time shunning stocks that are lagging. Subsequently, JM Flexi Cap Fund managed to generate a significant alpha over the benchmark and the category in recent years. Its outperformance has attracted investors' attention and its corpus has now soared to Rs 5,263 crore as of March 2025 from just Rs 269 crore as of March 2023.

In the last five years, JM Flexi Cap Fund's NAV has appreciated at a CAGR of about 28.7%; the benchmark BSE 500 - TRI grew by 24.7% during this period. An investment of Rs 10,000 in JM Flexi Cap Fund five years back would have now appreciated to Rs 35,312 compared to a valuation of Rs 30,130 for a simultaneous investment in its benchmark.

In recent years, JM Flexi Cap Fund has consistently found a place among the top performers in the Flexi Cap Fund category, and has also distinctly outpaced its benchmark BSE 500 - TRI. It has delivered rolling returns of 39.4% and 28.2% respectively in the last 2-year and 3-year period, thereby outperforming the benchmark by around 11-16 percentage points and evolving as a category topper. This superior performance has helped JM Flexi Cap Fund significantly improve its returns across periods, helping it generate a noteworthy lead over the benchmark and the majority of its peers. Over the longer time frames of 5 years and 7 years the fund has now found a spot among category outperformers and is much ahead of the benchmark.

Due to the momentum-driven strategy followed by the JM Flexi Cap Fund, the volatility registered by it (16.33% annualised) is higher than the category average (14.87%) and the benchmark (14.58%), it has managed to reward investors adequately. Regardless, its risk-adjusted return as denoted by the Sharpe ratio (0.29) is much ahead of the benchmark index and is currently among the best in the Flexi Cap Fund category.

What is the investment strategy of JM Flexi Cap Fund?

JM Flexi Cap Fund follows a dynamic investment approach to adapt investments in line with market conditions. It aims to maintain a well-balanced exposure across market caps and sectors with a view to navigating various market phases. The fund follows in-house GeeQ model to pick stocks which focuses on growth of earnings as well as quality of earnings. The fund's primary focus is to invest in stocks across sectors having high growth potential along with high earnings quality as determined by EPS growth, PEG, RoE, ROIC, cash flows, and debt-to-equity ratio, among others. It also evaluates them based on their management capabilities, governance standards, and competitive advantage.

JM Flexi Cap Fund's portfolio witnesses frequent changes; its turnover ratio in the last one year is around 110-150%. But while the fund holds many of its stocks with a short-term view, it maintains high conviction in certain stocks/sectors to generate superior risk-adjusted returns.

As of March 31, 2025, JM Flexi Cap Fund held 46 stocks in its portfolio with the top 10 stocks accounting for about 36.5% of its assets. The fund holds majority of its stocks with a short-term view. Its top holdings currently comprise large-cap stocks such as HDFC Bank, ICICI Bank, SBI, Sun Pharma, and Cholamandalam Investment and Finance. Notably, the fund usually restricts allocation in each mid and small-cap stock to under 3%.

In the last two years, JM Flexi Cap Fund benefitted the most from its holdings in REC, L&T, Blue Star, ICICI Bank, Kirloskar Engines, and SBI. It has also gained significantly from its exposure in Bharti Airtel, Biocon, Newgen Software Technologies, Mrs Bectors Food Specialities, Gulf Oil Lubricants India, Suven Pharma, Bajaj Finance, Arvind among others, that have risen in value since the time the fund added them in its portfolio. Meanwhile, it booked profit in HEG, Glenmark Pharma, KEC International, Jyothy Labs, Global Health, Signatureglobal (India), Amara Raja Energy & Mobility, among others.

In terms of sectors, JM Flexi Cap Fund currently holds exposure of about 33% in Banking & Finance stocks. It is also currently bullish on Consumption, Pharma, Engineering, Infotech, and Auto that form 36.9% of its assets. It has also diversified its portfolio across Power, Telecom, Transportation, Consumer Durables, and Healthcare, among others.

Is JM Flexi Cap Fund suitable for my investment goals and risk tolerance?

JM Flexi Cap Fund has done well under its current investment mandate, resulting in a remarkable lead over the benchmark and several of its prominent peers in recent years. With extraordinary performance recorded in recent years, the fund's returns across time frames look encouraging. The fund has delivered satisfactory performance across various market phases in the past, especially during market uptrends, and maintains a robust long-term performance record.

JM Flexi Cap Fund holds an actively managed portfolio spread across market caps and sectors with well-balanced exposure in each segment. It dynamically shifts the allocation based on market conditions and available opportunities. While JM Flexi Cap Fund's agile portfolio strategy has resulted in higher volatility, it has managed to reward investors with impressive risk-adjusted returns as denoted by its high-ranking Sharpe ratio.

JM Flexi Cap Fund is suitable for investors seeking exposure across market caps through agile portfolio management strategy with a time horizon of at least 5-7 years.

Watch this video to explore the top performing Flexi Cap Funds for 2025:

Note:  This write up is for information purpose and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Registration granted by SEBI, Membership of BASL and certification from NISM no way guarantee performance of the intermediary or provide any assurance of returns to investors.

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Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.

This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes.

DISCLOSURE AS PER SECURITIES AND EXCHANGE BOARD OF INDIA (RESEARCH ANALYSTS) REGULATIONS, 2014

About the Company including business activity

Quantum Information Services Private Limited (QIS) was incorporated on December 19, 1989.

QIS was promoted by Mr Ajit Dayal with an objective of providing value-based information/views on news related to equity markets, the economy in general, sector analysis, budget review and various personal products and investments options available to the Public. It was the first company to start equity research on an institutional level.

'PersonalFN' is a service brand of QIS and was started in the year 1999. In 1999, the Company registered the Domain name www.personalfn.com for providing information on mutual funds and personal financial planning, financial markets in general, etc. and services related to financial planning and research in various financial instruments including mutual funds, insurance and fixed income products to customers. It offers asset allocation and researched investment recommendations through its financial planning services.

Quantum Information Services Private Limited (QIS) is registered as Investment Adviser under SEBI (Investment Adviser) Regulations, 2013 and having Registration No.: INA000000680. In terms of the second proviso to Regulation 3 (1) of SEBI (Research Analysts) Regulations, 2014 the Company is not required to obtain Certificate of registration from SEBI.

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• Group Companies including:

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  2. PersonalFN Insurance Services India Private Limited;

  3. Equitymaster Agora Research Private Limited;

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  5. Quantum Advisors Private Limited;

  6. Quantum Asset Management Company Private Limited;

  7. HelpYourNGO.com India Private Limited;

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  10. Primary Real Estate Advisors Private Limited;

  11. HYNGO India Private Limited;

• Directors of the Company - Suresh Lulla; I V Subramaniam, Murali Ananthan Krishnan and Rafiq Dossani

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Quantum Information Services Private Limited CIN: U65990MH1989PTC054667 Regd. & Corp. Office: 103, Regent Chambers, 1st Floor, Nariman Point, Mumbai - 400 021

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