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NEW DELHI: IDFC Mutual Fund has announced the launch of an open-ended multi-cap fund that will invest in large-cap, mid-cap and small-cap equity and equity-related securities. The new fund offer (NFO) for the IDFC Multi Cap Fund will open for subscription on 12 November and close on 26 November.

A multi-cap fund as per regulations must have a minimum of 25% in large-caps (defined as the first 100 stocks by market cap), 25% in mid-caps (101st to 250th stock by market cap) and 25% in small-caps (251st stock onwards).

As per the asset management company (AMC), the scheme will also aim to benefit from allocations to tactical investment opportunities such as initial public offers (IPOs), new-age businesses, international equities and tactical cash positions.

The tactical allocation will be up to 20% of the total assets.

“This diversified investment blend is well-positioned to provide the combined benefit of higher growth potential from mid- and small-cap stocks, while aiming to reduce volatility through investments in large-cap stocks," the fund house said in a note.

The scheme will be managed by Daylynn Pinto (equity portion), Harshal Joshi (debt portion) and Viraj Kulkarni (overseas portion).

The minimum investment amount during the NFO period will be 5,000 and in the multiples of Re 1, thereafter. There will be an exit load of 1% if investors redeem or switch out within one year from the date of allotment, and nil, thereafter.

The IDFC Multi Cap Fund will be benchmarked to the NIFTY 500 Multicap 50:25:25 total return index (TRI).

“Our research indicates that a rolling five-year systematic investment plan (SIP) in a multi-cap index (Nifty 500 Multicap 50:25:25 Index), studied over the last 11 years, posted an average annualized return of 12%. In case of lump sum investments held for five years, entry timing did not restrict return potential as the multi-cap strategy yielded an attractive average return of 74.8% cumulatively, even if the investment were made at the highest level each year during the period," said Pinto.

As per the AMC, the IDFC Multi Cap Fund has been designed to maintain a sizeable allocation across all market caps combined with select tactical themes.

IDFC Asset Management Company had over 1.27 trillion in average assets under management (AUM) as of October.

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