[SEBI Circular] Impact of Multicap MF Schemes Allocation Changes
SEBI issued a circular on the 11th of September 2020 with a view to diversify the investments of underlying
investments of multi-cap funds across mid and small caps. Under the new guidelines SEBI has proposed raising
the minimum investment in equities for Multi Cap Funds to 75% of assets from the earlier 65% along with other
proposed changes listed below:
• Minimum investment of 25% of total assets in large cap companies.
• Minimum investment of 25% of total assets in mid cap companies.
• Minimum investment of 25% of total assets in small cap companies.
Mutual Funds have time until 1st Feb 2021 to comply with these rules.
These new rules will usher in a broader market rally. several expect many small and midcaps stocks might rally early next week in anticipation of probably augmented exposure by AMCs in these segments. Investors mustnt blindly rush in and get any and each stock in these segments on the back of probably flows by domestic institutional players, invest given that one is comfy with the basics and convinced concerning growth prospects of the company because it is that the solely driving factor in the longer haul.
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Click here to read full Circular: [SEBI] Circular on Asset Allocation of Multi Cap Funds