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Two fund houses Nippon India MF and Tata MF have stopped taking lumpsum money in their small cap funds.
Nippon India MF has stopped accepting lump sums and switch-ins in Nippon India Small Cap Fund, with effect from July 7, 2023.
However, these restrictions do not affect SIPs or STPs registered prior to the effective date and unit holders under dividend reinvestment option. Also, the fund house will continue to accept fresh SIPs, STPs and such other special product subject to a limit of Rs. 5 lakh per day per PAN.
Explaining the rationale, the fund house said, “The step is warranted considering the recent sharp rally in the small cap space and increased investor participation through high ticket investments which would be in the best interest of existing unit holders and appropriate for incremental investments.”
Tata MF has also temporarily suspended all fresh inflows through lump sum or switch-in in Tata Small Cap Fund with effect from July 1, 2023. The fund house clarified, “It may be noted that the temporary suspension is not applicable to existing SIP or STP and request for new SIP, STP registrations, redemptions, SWP and switch-out.”
While Nippon India Small Cap Fund has close to 3% exposure to cash, Tata Small Cap Fund cash exposure has increased to over 14% as on June 2023.
