FLEXI CAP FUNDS PROVIDE A WIDER CANVAS

NOT too long after SEBI introduced tightly defined categories of equity mutual funds based on market capitalisation, it woke up to the fact that many Asset Management Companies (AMCs) that ran multi-cap funds had portfolios that more or less mirrored other categories such as large cap, large and midcap or even mid-cap and small cap funds as it had set no predefined limits across Marketcapitalisations.

- ASHOK KUMAR

SEBI then announced that Multi Cap Funds are required to hold at least 75% of their assets in equity and equityrelated instruments at any point in time. Further, the portfolio must allocate at least 25% of its assets to large-cap stocks, 25% to midcap stocks, and another 25% to small-cap stocks. When the industry protested, SEBI back-tracked and created yet another category named Flexi-Cap Funds.