Thread by @IamMisterBond

My thoughts on NFO of @KotakMF Multi Cap Scheme:

Post recategorizations of schemes, most erstwhile Multi Cap Schemes were converted to Flexi Cap schemes where Fund Managers can decide what Allocation to which Market cap bias.

bit.ly/3BCX9mW

@NileshShah68

Thanks to that, there are very few Multi Caps available now which allocates min 25% each to Large, Mid and Small Caps and balance 25% that can be at the discretion of the Fund Manager.

What is the benefit of Multi Caps?

1. It takes away Fund Manager bias of going overweight or underweight in any market Cap bias

2. Most Flexi Caps are overweight on Large Caps

3. Though not negatively correlated, Large caps perform well in Risk-off situations and when markets become over valued and Mid and small Caps generally outperform in Risk-on situations and can hugely outperform Large caps (like 2020 -2021). Drawdowns can be equally accentuated

4. Multi Cap category will surely not be part of many portfolios post conversion by most AMCs of existing Multi Caps to Flexi Cap schemes

5. An ideal category to invest to participate in all Market cap bias spaces

Finally an NFO to truly fill the void created post #SEBI recategorization of schemes.

Remember to invest based on your own #AssetAllocation or thru strategies of #SIP or #SystematicTransfer in current market valuations.

I have always believed that NFOs should not be old wine in new bottle. It should fill void of a NEED of Investors or fill a void in an asset class which is not currently available.

I think Kotak Multi Cap NFO fills that NEED and the VOID both.