SEBI has tweaked exposure norms in multi cap funds – the second largest category in the equity funds after large cap funds.
In a circular issued today, the market regulator has asked fund houses to invest at least 75% of the total corpus across market capitalization with at least 25% exposure each to large cap, mid cap and small cap stocks.
SEBI has directed fund houses to align their existing portfolio within one from date of publication of the next list of stocks by AMFI. Since AMFI will be publishing its next list in January 2021, fund houses can rebalance their existing portfolio by February 2021.
AMFI in consultation with SEBI and the exchanges (NSE and BSE) publishes a list of stocks on a half-yearly basis. After the release of this list, fund houses have a month’s time to rebalance their portfolio.
Currently, many fund houses run a diversified portfolio in multi cap funds with large cap bias or mid & small cap bias. Also, fund managers frequently rebalance portfolio depending on market situation in multi cap funds.
