Page 19 - BANKING FINANCE NOVEMBER 2023

MUTUAL FUND

AMFI clarifies on new "The intent is to introduce a new as- respectively. The benchmark gave
set class, which lies between a mutual 18.42% and 14.79% respectively dur-
high-risk category of mu-
fund and PMS, which may have flexible ing the same time period. The scheme
tual funds prudential norms, with a certain mini- manages assets of Rs 928.22 crore as
Industry body AMFI said the idea of mum ticket size. Hence, any compari- on September 2023.
introducing a new asset class, which son with AIF/PMS is placed," it added.
lies between mutual fund and portfo- 6 flexi cap mutual funds
lio management services (PMS) and Edelweiss Recently Listed gave highest returns in the
have flexible prudential norms, is at a IPO Fund limits lumpsum
"very nascent stage". "The discussion past ten years
is at a very nascent stage and will go investments The continued market turmoil has
through the consultative approval pro- Edelweiss Mutual Fund has decided to prompted many investors to think if it
cess through the regulator," the indus- limit the lumpsum investment (includ- is worth investing in funds categorized
try body said in a statement. ing switch-ins) in Edelweiss Recently under a particular market cap or in-
The statement came after media re- Listed IPO Fund. The fund house has vesting in stocks dedicated to a particu-
ports suggested that the Securities decided to limit the subscription to Rs lar sector or theme. The fact that
market regulator, the Securities and 2 lakh per transaction. This change will some sectors have performed beyond
Exchange Board of India (Sebi), is in the be effective from November 6 until expectations while others have sunk
process of formulating a new high-risk further notice. much below than anticipated has
mutual fund category. caused many investors to now switch
The fund house informed this through
It was reported that the Association of a notice-cum-addendum on October to flexi-cap funds.
Mutual Funds in India (AMFI) sought 27. The fund house also stated that in- For the unversed, flexi-cap funds fall in
comments from asset management vestments through systematic invest- the category of equity-focused funds.
companies on the new mutual fund ment plan (SIP), systematic transfer These funds fall under the category of
category. The proposed category is plan (STP) and other facilities/special equity mutual funds, and they have the
aimed at catering to investors with a products offered will remain un- flexibility to invest in companies of vary-
highrisk appetite. changed. ing market capitalizations, spanning

Clarifying on the media reports, AMFI All the other provisions and terms and from large-cap to small-cap. While they
said that there is a whole spectrum of conditions of the scheme shall remain are required to allocate a minimum of
products in the securities markets in 65 per cent of their assets to equity and
unchanged. This addendum shall form
terms of the risks and the applicability equity-related instruments, there are
an integral part of the SID/KIM of the
of prudential norms. no constraints regarding the upper or
scheme, as amended from time to
"For instance, given the retail partici- time. lower limits of their exposure to differ-
pation in mutual funds, prudential ent market capitalizations. This flexibil-
Edelweiss Recently Listed IPO Fund is
norms applicable to mutual funds are ity empowers fund managers to adapt
an open-ended equity scheme follow-
higher, as compared to other invest- ing the investment theme of investing their portfolios to align with their in-
ment instruments, where prudential vestment perspectives.
in recently listed 100 companies or
norms are flexible in line with ticket To illustrate, in times of market vola-
upcoming Initial Public Offer (IPOs).
size of investment," it added. tility, a manager overseeing a flexi-cap
The scheme was launched in February
According to the industry body, there fund may opt to increase their alloca-
is a deliberation within the industry for 2018. The scheme is benchmarked tion to large-cap stocks. However,
against India Recent 100 IPO Index
an instrument that caters to investors when they identify potential growth
who are looking for an intermediate TRI. prospects, they can seamlessly transi-
investment product between mutual The scheme has offered 21.40% and tion their investments towards mid-cap
funds and PMS. 19.91% in three and five year horizons or small-cap stocks. T

18 | 2023 | NOVEMBER | BANKING FINANCE