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MUTUAL FUND

Mutual Fund

News

UTI MF's small-cap fund Change in portfolio allocation rules for Change in NAV calculation
multi cap equity mutual funds From January 1, investors will get the
UTI Mutual Fund will launch a new
offer on small cap fund which will be Sebi, in September, tweaked the purchase NAV of the day when
open for subscription till December 16. portfolio allocation rules for multi cap investor's money reach the AMC,
Minimum initial investment is Rs. equity mutual fund schemes. These new irrespective of the size of the
5,000 and additional purchase of Rs. rules will become effective from next investments. "It has been decided that
1,000. Exit load of one per cent will be year. According to the new rules laid in respect of purchase of units of
charged if units are sold before one down by Sebi, a multi cap mutual fund mutual fund schemes (except liquid
year of allotment. scheme will have to invest at least 75% and overnight schemes), closing NAV
in equities. Also, going forward, these of the day shall be applicable on which
The scheme aims is to generate long the funds are available for utilization
term capital appreciation by investing schemes will have to invest at least 25% irrespective of the size and time of
predominantly in equity and equity- each in large-, mid-, and small-cap
stocks. Currently there is no such receipt of such application," said the
related securities of small cap
allocation restriction and fund managers Sebi circular issued in September. The
companies.
can invest across the market cap as per new NAV rules will not be applicable to
Ankit Agarwal, Fund Manager, said the their own choice. At present the liquid and overnight funds.
fund will invest in companies that have minimum equity allocation must be 65%. Under current rules, the NAV of the
scalable business models, seasoned same day is considered for purchases
management and generate high return Sebi had provided time till January 31, of less than ?2 lakh, even if the money
on invested capital. "We have a 360 2021 to mutual fund houses to comply
with the latest rules, within one month does not reach the asset management
degree risk assessment framework to
from the date of publishing the next company (AMC), but the order is
mitigate the underlying risks and is
list of stocks by AMFI. placed within the cut-off time.
aligned to gain from small cap and
select mid-cap companies having Following concern in the industry, Sebi New Riskometer tool
growth opportunities," he added. later introduced a new mutual fund Sebi introduced a fresh category of
category called, flexi cap fund which is 'very high' risk on its riskometer tool
New mutual funds rules in required to invest at least 65% of the for investors to make better decisions
corpus in equity with no restrictions on with high risk mutual funds. It replaces
2021 investing in large-, mid- or small-cap the old model based simply on a
Sebi has introduced some measures company stocks. Some AMCs have scheme's category without adequately
which will be effective in the New Year. already reclassified their multi cap considering its actual portfolio. The
Some of these changes will come into schemes to flexi cap category to avoid new riskometer will become effective
effect from January 1, 2021 itself. any change in investment from January 1, 2021. Risk-o-meter
Here's the list: management of the fund. shall be evaluated on a monthly basis

BANKING FINANCE | JANUARY | 2021 | 15