SEBI Tweaks Multi-Cap Mutual Fund Asset Allocation Norms

SEBI on September 11, 2020 modified asset allocation in respect of multi-cap mutual fund to 75% allocation in equities as against 65% as per the current mandate.

Also, a minimum of 25% each in equity and associated securities of such largecap, midcap and smallcap companies, Sebi said in a circular.Further all of the current multi-cap funds will ensure compliance with the provisions within one month from the date of publishing of the next list of stocks by industry body Amfi (Association of Mutual Funds in India), that is January 2021, it added.

"In order to diversify the underlying investments of multicap funds across the large, mid and smallcap companies and be true to label, it has been decided to partially modify the scheme characteristics of multicap fund," the Securities and Exchange Board of India (Sebi) said.

But with no limitation in respect of allocation, most of multi-cap funds mobilize most funds into large-cap and and residual exposure in mid and smallcap.

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