Edelweiss Flexi Cap Fund: Banking Up, IT Down in H1 2026

The Edelweiss Flexi Cap Fund significantly rebalanced its portfolio in the first half of 2026, increasing exposure to banking and capital expenditure-linked sectors while reducing its IT allocation. This strategic shift has coincided with consistent outperformance against the Nifty 500 TRI over one, three, and five-year periods.

Portfolio Restructuring Details

Between January and June 2026, the fund expanded its holdings from 81 to 91 stocks, demonstrating a broader diversification strategy. During this period, it executed 21 new purchases and completely exited 12 stocks, maintaining a moderate portfolio turnover.

• Total holdings increased from 81 to 91 stocks.
• New purchases: 21.
• Stocks exited: 12.
• Portfolio turnover: 19%.

Enhanced Banking and Infra Focus

Banking emerged as the fund’s strongest conviction, with its portfolio weight rising from 22.7% in January to 24.3% in June, establishing it as the largest sectoral exposure. ICICI Bank became the top holding, increasing its weight from 4.9% to 6.0%.

• Banking sector weight: 22.7% (Jan) to 24.3% (Jun).
• ICICI Bank weight: 4.9% to 6.0%.
• Axis Bank exposure: Nearly doubled.

Beyond financials, the fund showed a clear preference for India’s capital expenditure and manufacturing themes. Electrical Equipment, Construction, and Power sectors saw notable increases, reflecting a focus on infrastructure spending and industrial investment.

• Electrical Equipment allocation: Increased by +2.9 percentage points.
• Construction allocation: Increased by +1.1 percentage points.
• Power allocation: Increased by +1.0 percentage point.
• Pharmaceuticals & Biotechnology allocation: Increased by +1.2 percentage points.

Reduced IT Allocation

Conversely, the IT-Software sector experienced the largest reduction, with its portfolio weight decreasing by 4.3 percentage points. The broader Finance sector also saw a significant reduction, indicating a move away from certain non-bank financial companies.

• IT-Software sector weight: Decreased by 4.3 percentage points.
• Broader Finance sector weight: Decreased by 2.1 percentage points.
• Infosys weight: Declined by 2 percentage points.

Sustained Outperformance Metrics

The fund’s long-term performance has been robust, consistently outperforming the Nifty 500 TRI across multiple timeframes. This active stock selection and sector rotation strategy has driven sustained wealth creation.

• One-year CAGR: 6.1% (Fund) vs. 3.4% (Nifty 500 TRI).
• Three-year outperformance: 3.4 percentage points.
• Five-year outperformance: 2 percentage points.

The Edelweiss Flexi Cap Fund’s strategic portfolio revamp in H1 2026, characterized by increased banking and infrastructure exposure alongside reduced IT allocation, has demonstrably contributed to its consistent market outperformance.