Flexi-cap funds are equity mutual funds that invest across market caps without any specific allocation mandate. The fund manager has full discretion in deciding how much to invest in each market cap segment—large, mid, or small. For example, when the bull markets prevail, there is a higher chance to be inclined toward mid and small cap stocks for this flexi-cap fund since there is a growth prospect at hand. In times of uncertainty, the manager will enhance their exposure to stable large-cap stocks. Thus, this helps the fund respond better towards the market trends which afford scope for growth while dealing with volatility.