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Sebi in its newest round on portfolio allocation of multi cap funds has made it necessary for such schemes to take a position at the least a minimal of 25% in massive cap, mid cap and small cap shares. At current, there isn’t a market cap restriction on multi cap funds. Dhirendra Kumar, CEO of Value Research calls it a ‘Puzzling new regulation by Sebi.’ He mentioned in a tweet, “Hard to understand what benefit this will bring or what harm it will prevent for investors.”
Dhirendra Kumar has questioned Sebi on twitter, the rationale for this sudden choice of this micro-management. He tweeted, ” Why is SEBI doing this? What benefit will this sudden micromanagement of investment strategies bring for investors?”
Kumar in his thread on twitter added, “Sudden decision by SEBI to start micromanaging funds’ investments at such a delicate time could be counterproductive for investors. Apart from punters who have unwisely piled into smallcap stocks and now need a rescue, no one else will benefit from this. In fact, by forcing fund managers to compulsorily sell big quantities of large-cap stocks and buy small cap stocks, this will harm investors’ interests.”
Here are Dhrirendra Kumar’s tweet thread:
Industry specialists and fund managers imagine this transfer will profit small and mid cap area. Mid cap and small cap shares will rally and traders of mid and small cap mutual funds who’ve been ready for good returns since December 2017, will see the NAVs of their holdings going up in over an 12 months, says Sunil Subramaniam, Managing Director, Sundaram Mutual Fund.
Abhimanyu Sofat, Head of Research at IIFL Securities gave a checklist of 11 mid cap shares that are anticipated to rally on account of shopping for by the AMCs.
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