PPFAS beats benchmark 99.6% of the time, but HDFC leads on returns: Which flexi-cap fund should you choose?

Flexi-cap mutual funds remain a popular choice among equity investors seeking diversification across large-, mid- and small-cap stocks. However, a comparison of four major schemes reveals an interesting divide: while Parag Parikh Flexi Cap Fund (PPFAS) leads on long-term consistency, HDFC Flexi Cap Fund has delivered stronger recent returns.

According to the latest data shared by FinAlpha, which compared PPFAS, HDFC, Kotak and Aditya Birla Sun Life flexi-cap funds, PPFAS outperformed its benchmark in an impressive 99.6% of three-year rolling return periods. Yet HDFC emerged as the strongest performer over three- and five-year horizons.

HDFC leads on returns

As of October 30, 2026, HDFC Flexi Cap Fund delivered a three-year compound annual growth rate (CAGR) of 15.8%, outperforming the Nifty 500 Total Returns Index's 10.3% return by 5.5 percentage points.

Aditya Birla Sun Life Flexi Cap followed with 15.3%, while PPFAS and Kotak Flexi Cap generated 12.4% and 11.4%, respectively.

Over five years, HDFC maintained its lead with a 15.5% CAGR, compared with 10.9% for PPFAS, 10.8% for Aditya Birla and 9.6% for Kotak.

However, Aditya Birla performed better over the past year, delivering a positive 1.1% return when the other three funds recorded negative returns.

Why PPFAS stands out

Despite trailing HDFC on recent returns, PPFAS demonstrated exceptional consistency.

The data showed that PPFAS beat the benchmark in 99.6% of 1,722 three-year rolling windows, compared with 62% for HDFC, 54% for Kotak and 35% for Aditya Birla.

Rolling returns measure performance across multiple overlapping investment periods, offering a broader assessment of consistency than returns calculated between two fixed dates.

PPFAS also recorded the lowest three-year volatility at 10.1%, compared with HDFC's 13.4%, Kotak's 15.2% and Aditya Birla's 14.8%.

Its downside capture ratio of 45 was substantially below HDFC's 70, suggesting stronger historical downside protection.

Different investment strategies

Portfolio composition explains some differences between the funds.

PPFAS maintained a relatively concentrated portfolio of 37 stocks, with its top 10 holdings accounting for 51% of assets. It also held 11.9% in international equities and 8.6% in debt.

HDFC held 79 stocks, with 95% equity exposure. Its portfolio included 15.7% mid-cap and 10.6% small-cap allocations within equities.

HDFC also recorded the highest portfolio turnover at 24.3% between March and September 2026, against PPFAS's 7.5%.

Which fund should investors choose?

HDFC may appeal to investors prioritising stronger recent performance, while PPFAS offers a record of consistency, lower volatility and international diversification.

However, historical outperformance does not guarantee future returns. Investors should assess risk appetite, investment horizon, portfolio overlap and asset allocation before choosing a scheme.

Importantly, switching funds solely because another scheme has recently delivered higher returns could trigger taxes and undermine long-term wealth creation.