Flexi-cap and multi-cap funds both invest across market caps, but differ in their flexibility. SEBI has a mandate for the allocation of at least 25% in each market segment for multi-cap funds, thus restricting their flexibility. However, flexi-cap funds do not have such restrictions and it is completely up to the discretion of the fund manager to shift allocations as and when the market opportunity calls for it.
Before you invest in a flexi-cap fund, look for experienced managers who have good tracks records of adapting to market cycles. Please ensure that the expense ratio is reasonable since actively managed funds typically come with higher fees; besides, past performance should be aligned with financial goals and risk tolerance