Mutual Fund News : Aditya Birla Sun Life MF Changes Fundamental Attributes of Aditya Birla Sun Life Equity Fund

Publish Date:

Aditya Birla Sun Life Mutual Fund has announced a change in fundamental attributes of its Multi Cap scheme ‘Aditya Birla Sun Life Equity Fund’.

With effect from January 30, 2021, the fund will be recategorized into a newly introduced Flexi Cap Funds category, and has will be renamed as ‘Aditya Birla Sun Life Flexi Cap Fund’.

It will be positioned as an open ended dynamic equity scheme investing across large cap, mid cap, and small cap stocks.

The investment objective of the scheme will be ‘to generate long term growth of capital, through investment in equity & equity related instruments across market cap (large, mid & small) companies.’

Aditya Birla Sun Life Equity Fund was till now categorized as a Multi-cap Fund, where earlier it had the freedom to invest across market capitalizations and sectors based on the view of the fund manager. However, in September 2020, the SEBI had defined new rules for multi-cap funds, which are required to invest at least 25% of the corpus each in large cap, mid cap and small-cap stocks. Hence putting minimum investment condition across market cap segment.

After categorization under Flexi Cap funds, Aditya Birla Sun Life Flexi Cap Fund will have the freedom to invest across large cap, mid cap, and small cap stocks in any proportion. It will hold 65% to 100% of its assets in Equity & Equity related instruments (across large, mid and small cap companies), whereas 0% to 35% of its assets can be held in Debt & Money Market instruments.

The new provision will be effected in the Scheme Information Document (SID) and Key Information Memorandum (KIM) of the scheme under the relevant section and will come into effect from January 30, 2021.

Here is the list of Multi Cap funds that have announced the change in their categorization to Flexi Cap Funds:

Old Name New Name With Effect From
Aditya Birla Sun Life Equity Fund Aditya Birla Sun Life Flexi Cap Fund 30-Jan-2021
Axis Multicap Fund Axis Flexi Cap Fund 30-Jan-2021
BOI AXA Multi Cap Fund BOI AXA Flexi Cap Fund 03-Feb-2021
DSP Equity Fund DSP Flexi Cap Fund 28-Jan-2021
Edelweiss Multi Cap Fund Edelweiss Flexi Cap Fund 28-Jan-2021
Franklin India Equity Fund Franklin India Flexi Cap Fund 29-Jan-2021
HDFC Equity Fund HDFC Flexi Cap Fund 29-Jan-2021
HSBC Multi Cap Equity Fund HSBC Flexi Cap Fund 28-Jan-2021
IDBI Diversified Equity Fund IDBI Flexi Cap Fund 30-Jan-2021
JM Multicap Fund JM Flexicap Fund 30-Jan-2021
Kotak Standard Multicap Fund Kotak Flexicap Fund 01-Feb-2021
Motilal Oswal Multicap 35 Fund Motilal Oswal Flexicap Fund 06-Feb-2021
Parag Parikh Long Term Equity Fund Parag Parikh Flexi Cap Fund 13-Jan-2021
PGIM India Diversified Equity Fund PGIM India Flexi Cap Fund 31-Jan-2021
Shriram Multicap Fund Shriram Flexi Cap Fund 29-Jan-2021
Union Multi Cap Fund Union Flexi Cap Fund 28-Jan-2021

Source: Notice & Addendum’s released by the respective AMCs

In our view, the recategorization of these Multi Cap Funds to Flexi Caps will not have any significant impact on the way these funds are managed.

Under the new category and name these funds will continue to follow their current investment strategy as it offers complete flexibility for the fund while investing across market cap segments.