Multi-cap schemes that have changed to flexi-cap

[Bhuvan]

In November 2020, SEBI had issued a new circular on the creation of a new mutual fund category called flex-cap schemes. Schemes in this category can invest anywhere across large, mid, and small-cap stocks.

What will be the impact of SEBI's new circular on how multi cap funds can invest?

This is a pretty huge move that can have some really big impact on the markets. To set some context, in 2017, SEBI had re-categorized all mutual fund categories and strictly defined that universe of stocks by that funds could invest in. As per categorization, this was the mandate for multi cap funds: Minimum investment in equity & equity related instruments- 65% of total assets Investors like this category because it could invest anywhere across large, mid, and small caps based on the the f…

These are schemes that have categorized themselves from multi-cap to flexi-cap category.

Old scheme name	New scheme name
Aditya Birla Sun Life Equity Fund	Aditya Birla Sun Life Flexi Cap Fund
Axis Multicap Fund	Axis Flexi Cap Fund
BOI AXA Multi Cap Fund	BOI AXA Flexi Cap Fund
Canara Robeco Equity Diversified Fund	Canara Robeco Flexi Cap Fund
DSP Equity Fund	DSP Flexi Cap Fund
Edelweiss Multi Cap Fund	Edelweiss Flexi Cap Fund
Franklin India Equity Fund	Franklin India Flexi Cap Fund
HDFC Equity Fund	HDFC Flexi Cap Fund
HSBC Multi Cap Equity Fund	HSBC Flexi Cap Fund
IDBI Diversified Equity Fund	IDBI Flexi Cap Fund
IDFC Multi Cap Fund	IDFC Flexi Cap Fund
JM Multicap Fund	JM Flexicap Fund
Kotak Standard Multicap Fund	Kotak Flexicap Fund
L&T Equity Fund	L&T Flexicap Fund
LIC MF Multicap Fund	LIC MF Flexi Cap Fund
Motilal Oswal Multicap 35 Fund	Motilal Oswal Flexicap Fund
PGIM India Diversified Equity Fund	PGIM India Flexi Cap Fund
Parag Parikh Long Term Equity Fund	Parag Parikh Flexi Cap Fund
Shriram Multicap Fund	Shriram Flexi Cap Fund
Taurus Starshare (Multi Cap) Fund	Taurus Flexicap Fund
Union Multi Cap Fund	Union Flexi Cap Fund
UTI Equity Fund*	UTI Flexi Cap Fund

[rupeshmandal]

@Bhuvan, I have a request:

Whenever such changes are made by an AMC, they always give an option to the investors to make an exit within a stipulated time frame without any exit load (capital gains/ loss apply, if any). This acts as an opportunity for some.

E.g. in above case, PPFAS Long Term Equity Fund had 2% exit load if redeemed before 1 year and 1% exit load if redeemed before 5 years. But one can redeem without paying exit load because of the changes in structure of fund. That’s an opportunity for someone wanting to quit.

Hence, if such incidents are being notified by Coin, it would be really helpful. Sort of how Nudge feature of Kite works. Because once the addendums are published on the website, they get lost, and people forget to act.

I remember you had mentioned you are working on a periodic newsletter to talk about important things. You may add this feature to it?

Monthly Mutual Fund Industry Reports

Not a priority and in our experience hardly 1 or 2 users have asked for it. We don’t want to write send alerts about MF industry news etc because mostly it’s noise and 100 people are writing about it, there is very little value we can add. But we are working on a period newsletter to talk about important things that actually make a difference to investors. Fund manager changes, scheme attribute changes etc do make sense, will look into it.