SBI Mutual Fund Reclassifies Schemes

SBI Funds Management Private Limited, the Asset Management Company has re-classified its various schemes to make them simpler to compare and reduce clutter in accordance with market regulator SEBI's new directives.

Along with the re-classification, the company is also giving exit options to its existing investors who are not happy with the changes.

In its letter to investors, the SBI fund house said, "Certain changes will be carried out in the features of some of our schemes, resulting in changes in fundamental attributes of certain schemes of SBI Mutual Fund (MF)".

Changes will be made to funds like Magnum Equity Fund, Magnum Multiplier Fund, Emerging Businesses Fund, FMCG Fund, IT Fund, Pharma Fund and Corporate Bond Fund.

Changes have been proposed in types of the schemes, the objective of the investment, asset allocation, and investment strategy which will change the fundamental attributes of the schemes.

You can find the detailed notification released by SBI Mutual Funds here.

Exit Options

The fund house is giving an exit option to its existing investors who do not agree with the changes without any exit load. The redemption or switch in mutual funds will be made at applicable net asset value (NAV). The option will only be valid from April 16 to May 15.

"Any redemption or switch request received after May 15 will be subject to the prevailing load structure as applicable and will not qualify for the waiver of the exit load," it added.

The exit option is not compulsory. For those in agreement with the changes, no action is required.

"Redemption/ switch-out by the unit holders due to aforesaid change or due to any other reasons may entail tax consequences. Unit holders are advised to consult their tax advisor for the same," the fund house said.