Sebi on September 11 issued a circular guiding new portfolio allocation rules for multi cap mutual fund schemes where a multi cap fund has to invest at least 25% each in large cap, mid cap and small cap stocks. On Sunday evening, Sebi issued another circular to make clarifications regarding the initial circular. Sebi, in its clarification circular, allowed flexibility to mutual funds to comply with the new rules. It said, ” Apart from rebalancing the portfolio, mutual fund houses can facilitate switch to other schemes by the unit holders or, merge their multi cap scheme with their large cap scheme or convert their multi cap scheme to another scheme category for an instance, large cum mid cap scheme.
Amfi welcomed the step and fund managers took on to Twitter to calm investors. Nilesh Shah, Chairman Amfi and Managing Director, Kotak Mahindra Mutual Fund expressed his gratitude to Sebi for issuing clarification and advised investors not to take any investment decision in haste.
Nilesh Shah wrote on twitter, “Immense gratitude to SEBI for issuing clarification on a Sunday evening. We will ensure compliance with SEBI Regulations in letter as well as spirit & optimize risk adjusted return for our Investors.
Don’t take Investment decisions in haste.”
Kotak Mutual Fund’s Standard Multicap Fund is the largest fund in the respective category holding assets over ₹29,000 crore. The scheme has maintained its large cap allocation to around 70%.
Here’s his tweet:
Rajeev Thakkar, CIO, PPFAS Mutual Fund, managing the best performing multicap Fund – Parag Parikh Long Term Equity Fund also asked investors to stay calm. He wrote on twitter, “All will be fine, no knee jerk reactions please.”
Parag Parikh Long Term Equity Fund apart from domestic equities invest over 28% in international equities. The scheme has outperformed its peers with 15% annualised returns both in 3-year SIP and 5-year SIP.
Here’s Rajeev Thakkar’s tweet: