Kotak Standard Multicap to become 'Flexi Cap Fund', no change in portfolio, investment process1 min read . Updated: 08 Nov 2020, 09:03 AM IST
- Kotak Standard Multicap Fund to be renamed as Kotak Standard Flexi cap Fund
- Fund manager, investment process and fund portfolio will remain the same as before
Kotak Standard Multicap Fund, the biggest multi cap scheme holding assets worth ₹29,551 crore will move to 'Flexi Cap Category', the new category introduced by Sebi under equity mutual funds. The new category was announced on Friday, after the mutual fund companies requested Sebi to form a new category, called 'flexi cap' to avoid huge disturbance in the existing multi cap funds amid Sebi's new portfolio allocation rules. Mint reported earlier.
"Kotak Standard Multicap Fund which is the largest multi cap fund in India and has built a strong track record over the years through disciplined investment process will move towards Flexi cap category after taking requisite approvals and following due process," says Nilesh Shah, Group President & Managing Director, Kotak Mahindra AMC.
Nilesh Shah adds, "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."
Kotak Standard Multicap Fund is the largest actively-managed equity mutual fund scheme.
Sebi defines flexi cap equity mutual fund as an open ended dynamic equity scheme investing across large cap, mid cap, small cap stocks. A flexi cap fund will have to maintain at least 65% of its assets in equities.
The industry heartily welcomed Sebi's circular on Flexi Cap Category. Undoubtedly, most existing multi cap funds will reclassify themselves under the new category.
"This is a welcome move by SEBI. A flexicap strategy will allow the fund manager to invest wherever value and opportunities are available without restrictions. Investors can be at ease now that the multicap funds that they had invested will continue to operate, albeit with a new name. We are happy about this development," says Neil Parag Parikh, Chairman and CEO, PPFAS MF.
Parag Parikh Long Term Equity Fund is the best performing scheme in the category. The scheme manages assets worth ₹4,798 crore.
Sebi, in September, announced to tweak the asset allocation rules for multi cap funds. According to the circular, a multicap fund must invest a minimum of 75% in equity and equity related instruments in the following manner:
Minimum allocation to large cap companies: 25%
Minimum allocation to mid cap companies: 25%
Minimum allocation to small cap companies: 25%
Sebi gave time till January 31, 2021 to mutual fund houses to comply with the latest rules.