SEBI decides that Multicap funds must truly be multicap - so min 25% in large caps, min 25% in midcaps and min 25% in smallcaps.
Smallcaps are companies below roughly 7,000 cr. market cap. Cannot absorb the buying.
We're going to see money flow out of multicap funds..
Smallcaps are companies below roughly 7,000 cr. market cap. Cannot absorb the buying.
We're going to see money flow out of multicap funds..
This could fuel a smallcap rally, even in anticipation. However,
...the SEBI rule indicates that at 75% equity, a multicap fund can't have foreign exposure beyond 25%, which will hurt some.
SEBI must change this. Obviously the small caps can't handle this kind of volume.
Could change this to a 40/25/10 kind of allocation minimum as well. Or a 35/25/15.
I know, this is micro regulation, but there's more to it than we realize.
Could change this to a 40/25/10 kind of allocation minimum as well. Or a 35/25/15.
I know, this is micro regulation, but there's more to it than we realize.
Please also note:
This mutual fund change has to be done by end Jan 2021, based on what is a small/mid/large cap on Dec end 2020.
Lots of time. Likely to see SEBI make this more sensible by then. No need to react in haste.
This mutual fund change has to be done by end Jan 2021, based on what is a small/mid/large cap on Dec end 2020.
Lots of time. Likely to see SEBI make this more sensible by then. No need to react in haste.
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