SBI Multicap Fund, after closing its new fund offer (NFO) early this week, garnered ₹7,500-8,000 crore in the fund. This is believed to be the highest ever collection seen in the multi-cap schemes, officials in the industry claimed, reported Business Standard.
This open-ended equity scheme will invest in a mix of best ideas across large, mid, and small cap companies that will be identified through a robust research process. The NFO that closed on February 28 was opened on February 14, 2022, wrote BS.
The benchmark index of the fund is Nifty 500 Multicap 50:25:25 TRI. The fund adds the strength of high conviction stock ideas of the sector analysts which will be selected from the fund house’s active coverage universe (nearly 350 companies).
Multicap schemes are supposed to invest a minimum of 25 per cent of the corpus in large-, mid, and small-cap stocks each. Before the changes in the regulations came into force, multicap funds were free to invest across the market cap depending on the fund manager’s discretion.
However, these changes (at least 25 percent in each category) were made to make sure the funds stay ‘true to their label’.
Lately, this is the second time an asset management company has garnered such a large sum. In August 2021, the SBI MF raised a record ₹14,551 crore in its balanced advantage fund.
After looking at the pros and cons of mutual funds across market capitalisation – analysts assert that multi cap funds rank higher than their counterparts in other categories. Multi-cap funds are diversified equity funds which invest in stocks of companies with different market capitalisations. The investments are made in varying proportions to meet the investment objective of the fund.
Multi-cap fund category has been among the best-performing equity categories in the one-year period, data from Value Research shows. The category has given 40.86 percent returns on an average. Only small-cap, information technology (IT) and infrastructure sector funds have done better.
Other multi cap funds’ NFO (new fund offer) also received a good response. For instance, Axis MF’s multi-cap fund garnered ₹4,779 crore, whereas HDFC MF’s multi cap schemes fetched ₹4,000 crore in Nov-Dec 2021.