Sebi, in its latest circular on multi-cap fund portfolio allocation, has made it mandatory for such schemes to invest at least 25% in large-cap, mid-cap, and small-cap stocks. Currently, there is no market cap restriction for multi-cap funds. Dhirendra Kumar, CEO of Value Research, calls it a “puzzling new regulation from Sebi.” She said in a tweet: “It is difficult to understand what benefit this will bring or what harm it will avoid for investors.”
Dhirendra Kumar has questioned Sebi on twitter, the reason for this sudden decision of this micromanagement. He tweeted: “Why is SEBI doing this? What benefit will this sudden micromanagement of investment strategies bring to investors?”
Kumar in his Twitter thread added: “SEBI’s sudden decision to start micromanaging the fund’s investments at such a sensitive time could backfire on investors. Aside from punters who have recklessly piled on small-cap stocks and Now they need a bailout, no one else will. Benefit from this. In fact, by forcing fund managers to mandatorily sell large amounts of large-cap stocks and buy small-cap stocks, this will hurt investors’ interests. “
Here are Dhrirendra Kumar’s tweets:
Industry experts and fund managers believe this move will benefit the small and mid-cap space. Small- and mid-cap stocks rebound and small- and mid-cap mutual fund investors who have been expecting good returns since December 2017 will see the net asset value of their positions rise in more than a year, says Sunil Subramaniam, CEO of Sundaram. Investment fund.
Abhimanyu Sofat, head of research at IIFL Securities, listed 11 mid-cap stocks that are expected to rally due to the AMC purchases.
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