The current market situation cannot be ignored. Even SIPs, long considered one of the most reliable ways to navigate market downturns, now appear to be under pressure. From young investors using SIPs for short-term goals like buying a smartphone, to individuals in their late 40s planning for retirement, many investors are feeling uncertain about the road ahead.
Given the current volatility, flexicap funds are gaining attention. Sample this – This equity mutual fund category received the highest net inflows of ₹10,147 crores in April 2026.
What are Flexi Cap Funds?
Flexi cap funds are types of equity mutual funds that invest at least 65% of their collected money in equity and related instruments. They invest across large-cap, mid-cap, and small-cap stocks.
These funds are often called “go-anywhere” funds because they are not limited to investing in companies of a particular size. They are flexible and allow fund managers to shift investments across large-, mid-, and small-cap stocks depending on market conditions and the overall economic outlook.
These funds are suitable for investing through SIP because you can invest regularly to tackle the market volatility across the market capitalisation.
How to Select the Best Flexi Cap Fund in a Falling Market?
In volatile markets, investors often look beyond returns and focus on funds that offer better downside protection. In this context, the Sortino Ratio becomes a crucial metric, as it measures risk-adjusted returns by focusing solely on downside volatility, helping investors assess how well a fund manages negative fluctuations rather than overall volatility.
Sortino ratio reflects a risk-adjusted performance ratio that measures how much returns a mutual fund generates in comparison to the downside risk it holds. It does not consider upside or positive volatility and only assesses return potential relative to the downside.
For example, two funds (A and B) delivered the same 15% return, but A has a Sortino Ratio of 2 and B has a ratio of 1.
Even though both funds delivered the same 15% return, their risk profiles differ significantly when measured by the Sortino Ratio. Fund A, with a Sortino Ratio of 2, achieved returns with relatively low downside volatility, meaning its losses below the target level were limited and infrequent. In contrast, Fund B, with a Sortino Ratio of 1, experienced significantly higher downside volatility, indicating deeper or more frequent losses during its return journey. In simple terms, Fund A generated the same return as Fund B but with roughly half the downside risk, making it the more stable and risk-efficient investment option.
Investors can check the Sortino ratio of the funds they invest in in the fund’s fact sheet.
Top 5 Flexi Cap Funds with the Highest Sortino Ratio
Here is the list of the top 5 flexi cap funds you can consider based on the Sortino ratio:
| Fund Name | Sortino Ratio | 3-Yr Returns |
| Parag Parikh Flexi Cap Fund |
1.47 |
16.81% |
| Bank of India Flexi Cap Fund | 1.36 | 23.07% |
| WhiteOak Capital Flexi Cap Fund | 1.18 | 18.15% |
| Quant Flexi Cap Fund | 1.17 | 20.06% |
| HDFC Flexi Cap Fund | 1.16 | 18.83% |
*Data as of May 21, 2026, Direct Plans, Source: Value Research
Parag Parikh Flexi Cap Fund has the Sortino ratio of 1.47, which is the highest in this category. This means that even if the fund has generated lower returns over the last 3 years than other funds, it has still delivered returns with lower downside risk.
When the market is facing downward pressure, it is always good to check for bad volatility before investing.
Disclaimer: This is purely for educational/ informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.