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Flexi-cap fund without restrictions allows you to invest across large, mid, and small-cap stocks, whereas a multi-cap fund should invest in all three categories with 25% allocation in each stock.
Multi-cap funds are ideal for those NRIs who prefer diversification with mandatory exposure across all market caps, i.e., large, mid, and small. Flexi-cap funds are perfect for NRIs looking for dynamic allocation and flexibility.
Yes, NRIs are allowed to invest in both flexi-cap and multi-cap funds, subject to FATCA, KYC norms, and country-specific restrictions such as Canada/ USA.
Yes, both multi-cap and flexi-cap funds have the same taxation for NRIs, as both are equity-oriented funds. Considering this, STCG is charged at 15% and LTCG is imposed at 10% on the amount more than INR 1,00,000.
No, NRIs do not need to open a demat account to invest in multi-cap and flexi-cap funds. They can directly invest in these funds through NRE/ NRO accounts via mutual fund platforms.
Multi-cap funds have slightly higher risk than flexi-cap funds due to mandatory allocation in small-cap stocks. Further, flexi-cap funds during volatility, risk can be adjusted to large caps.
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By Manish Prajapat |Last Updated: December 19, 2025
