SEBI’s new rule for Multicap schemes of Mutual Funds


SEBI on September 11, 2020 released a direction for multicap schemes of mutual fund for investing minimum 25% of funds in each marketcap i.e. Large, Mid and Small. Presently, there is around 1.5 Lakh crores of assets under multicap category of mutual fund and majority of allocation is towards largecap and only ~5% funds are invested in smallcaps.

“This is definitely a welcome move, as good companies beyond 251st rank, will see new Rs 25,000 crore (Rs 10,000 crore already invested in smallcap companies) by January 2021. New SEBI guidelines will give a free hand to fund manager of multi-cap MF schemes (same size as largecap schemes-quite favourite amongst investors) to invest in good companies in smallcap basket. Also, the smallcap basket, ignored owing to the focus on top 250 companies, will gain attention and will support the current broad-based rally of 2020, compared to the polarised market of the past two years. The view is shared by Amit Doshi, Investment Director with

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