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Sebi issued one other round on Sunday night to present clarification on its September 11 round on ‘portfolio allocation rules for multi cap funds.’ Sebi mentioned, the necessity to change the asset allocation in multi cap funds arose to make them ‘true to their label’. “In order to achieve the objectives of True to Label and Appropriate Benchmark, a need was felt to review the scheme characteristics of Multi Cap schemes and take necessary steps to clearly distinguish Multi Cap schemes from other category of schemes,” learn Sebi’s clarification round.
The Market Regulator famous that some multi cap schemes had skewed portfolio. It mentioned, “Multi cap schemes have flexibility in terms of allocation to large, mid and small cap stocks. However, it has recently been observed that some multi cap schemes have skewed portfolios, with over 80% of investment in large cap stocks akin to large cap schemes, and some multi cap schemes have near zero or insignificant asset allocation to small cap companies.”
Sebi, in its newest round has supplied many choices to the mutual fund homes to meet the new portfolio allocation rules. Apart from rebalancing the portfolio, Sebi listed the next choices for AMCs to comply to the new rules:
- facilitate change to different schemes by the unit holders
- merge their multi cap scheme with their giant cap scheme
- convert their multi cap scheme to one other scheme class for an occasion, giant cum mid cap scheme
“Sebi is conscious of market stability and therefore has given time to the Mutual Funds till January 31, 2021 to achieve compliance with the circular, through its preferred route of which rebalancing of the portfolio is only one such route,” mentioned the round.
Sebi is open to look at any proposals from the trade obtained on this regards.
Mutual fund managers ask traders not to make any funding resolution in haste. They guarantee, all the pieces shall be high quality.
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