Fund houses with large multi cap funds are looking to reclassify their multi cap funds as flexi cap funds.
Kotak MF, which has the largest multicap fund in the industry has announced that it will reclassify its fund as flexi cap category. "Except the name of the fund which will be renamed as Kotak Standard Flexi cap Fund, everything else viz. fund manager, investment process and fund portfolio will remain the same as before," said Nilesh Shah, MD, Kotak MF.
Motilal Oswal MF has also announced the reclassification of its multi cap fund as flexi cap fund. "We would be reclassifying ‘Motilal Oswal Multicap 35 Fund’ from the multi cap fund category to the flexi cap fund category and the proposed name of the fund could be ‘Motilal Oswal Flexi Cap 35 Fund’. There would be no change in the way the fund is being managed currently and Akash Singhania will continue to be the fund manager as well," the fund house said in a press release.
Many other fund houses are likely to come up with similar announcements after SEBI introduced the flexi cap fund category. The flexi cap category will be in line with erstwhile multi cap funds where fund managers can take equity exposure of at least 65% across market capitalisation.
This will ensure a smooth transition for large multi cap funds, as it will help them overcome the challenge of making considerable changes in their portfolio by January 31, 2021.
SEBI, in September, tweaked the asset allocation rules for multi cap funds. The market regulator has said that from Jan 31, 2021, multicap funds must invest a minimum of 25% each in large cap, mid cap and small cap companies.
