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:
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.