The regulator tweaked the investment mandate of multi-cap funds which came into effect from January 2021. As per their revised investment mandate, multi-cap funds are required to invest at least 25 per cent of their assets each in large-, mid- and small-cap stocks. As per older mandate, fund managers were allowed to invest freely across the market-capitalisation range in any proportion
Is all Multicap fund fund became Flexicap fund now ?
No, not all the Multicap funds have been changed to Flexicap fund. The below table lists the multi-cap funds which have already announced their decision to switch to the Flexi-cap category. More funds will confirm their transition as they change their name ( Source Value Research )
As mentioned above, this change doesn't really mean much other than a change in the name. You can continue to remain invested in these schemes for its basic benefit like- portfolio diversification and risk reduction
Will this change is good for investors ?
The new regulation and mandate to invest 25% in each of the categories, Largecap, Midcap and Smallcap funds respectively, will be a nice balanced way to diversify the Risk. This new flex-cap fund will allows investors to diversify their investment portfolio across companies of different market capitalisation, mitigating risk and lowering volatility. You can comfortably remain invested in this fund for your long term wealth creation.
Important : This communication is a part of the legal information related to scheme name change and new scheme category. Investors are advised to refer the offer document and SEBI assigned RiskOmeter before making their final selection
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