UPDATE ON 14-09-2020

Sebi multicap fund rules: ‘Expect healthy returns in mid- and small-cap funds'

·         This will also lead to more inflows in mid cap and small cap funds now

·         The multi cap mutual fund category manages assets worth ₹1.46 lakh crore as on August 31


SebiMulti cap funds

Sebi has tweaked the portfolio allocation rules for multi cap equity mutual fund schemes on Friday. According to the new rules, multi cap mutual funds will have to invest at least 75% in equities. At present the minimum equity allocation must be 65%. Also, going forward, these schemes will have to invest at least 25% each in large cap, mid cap and small cap stocks. Currently there is no such allocation restriction and fund managers can invest across the market cap as per their own choice. Mutual funds have been told to abide by the new rules by January end next year. While all these changes happen in multi cap funds, the investors of mid and small cap funds tend to benefit indirectly. How..?

“The good news for people who have invested in mid and small cap funds is that they will see the prices of their holdings going up due to accelerated buying in mid and small cap space by the multi cap funds in January next year. We will see a rally in the mid and small space," says Sunil Subramaniam, Managing Director, Sundaram Asset Management in a YouTube video uploaded by the AMC.

Subramaniam further explains that the existing mid-and small-cap fund investors who have not had a very good experience since the December 2017 market peak, will see healthy returns on mid and small cap funds over the next year. He adds, “This will also lead to more inflows in mid cap and small cap funds now."

Abhimanyu Sofat, Head of Research at IIFL Securities believes that mutual fund houses will mostly buy the stocks with which they are comfortable. He said, “The multi cap funds may increase the allocation mostly towards their existing mid and small cap holdings going further to comply with the portfolio allocation rules." Sofat gave a list of 11 mid cap stocks which are expected to rally due to buying by the AMCs.

Multi cap fund category is the biggest category among the equity-oriented mutual fund schemes with a 19% share in the actively managed equity-oriented schemes, along with large cap category which also constitutes the similar share of 19%, followed by mid cap (11.53%) and large & mid cap categories (7.5%). The multi cap mutual fund category manages assets worth ₹1.46 lakh crore as on August 31.



  Scheme Name 
AuM (Cr) 
1 Kotak Standard Multicap Fund - GrowthMulti Cap Fund 29714
2 HDFC Equity Fund - GrowthMulti Cap Fund 19798
3 Motilal Oswal Multicap 35 Fund - GrowthMulti Cap Fund 11240
4 Aditya Birla Sun Life Equity Fund - Regular Plan - GrowthMulti Cap Fund 11023
5 UTI Equity Fund - GrowthMulti Cap Fund 10983
6 SBI Magnum MultiCap Fund - GrowthMulti Cap Fund 9063
7 Franklin India Equity Fund - GrowthMulti Cap Fund 8591
8 Nippon India Multicap Fund - GrowthMulti Cap Fund 8053
9 Axis Multicap Fund - GrowthMulti Cap Fund 6434
10 ICICI Prudential Multicap Fund - GrowthMulti Cap Fund 5594
11 IDFC Multi Cap Fund - Regular Plan - GrowthMulti Cap Fund 4847
12 Parag Parikh Long Term Equity Fund - GrowthMulti Cap Fund 4508
13 DSP Equity Fund - Regular Plan - GrowthMulti Cap Fund 3726
14 L&T Equity Fund - GrowthMulti Cap Fund 2366
15 Canara Robeco Equity Diversified - Regular Plan - GrowthMulti Cap Fund 2280
16 Tata Multicap Fund - GrowthMulti Cap Fund 1695
17 Invesco India Multicap Fund - GrowthMulti Cap Fund 925
18 Axis Capital Builder Fund - Series 4 - GrowthMulti Cap Fund 921
19 Baroda Multi Cap Fund - Plan A - GrowthMulti Cap Fund 825
20 Principal Multi Cap Growth Fund - GrowthMulti Cap Fund 654
21 UTI Focussed Equity Fund - Series V - (1102 D) - GrowthMulti Cap Fund 624
22 DSP A.C.E. Fund - Series 1 - GrowthMulti Cap Fund 622
23 Sundaram Equity Fund - GrowthMulti Cap Fund 600
24 Nippon India India Opportunities Fund - Series A - GrowthMulti Cap Fund 575
25 Edelweiss Multi-Cap Fund - Regular Plan - GrowthMulti Cap Fund 560
26 BNP Paribas Multi Cap Fund - GrowthMulti Cap Fund 555
27 IDFC Equity Opportunity - Series 5 - Regular Plan - GrowthMulti Cap Fund 532
28 Kotak India Growth Fund - Series IV - GrowthMulti Cap Fund 482
29 Axis Capital Builder Fund - Series 1 - GrowthMulti Cap Fund 479

UPDATE ON 31-07-2020

Investors abandon mutual funds, flock to stocks and ETFs in July

June-July could see biggest two-month ETF inflows in a year, mutual funds headed for first monthly outflows in four years.


Investors are shifting from mutual funds to investing directly in stocks and exchange traded funds (ETFs) at the quickest pace in the recent years, coaxed by higher returns and ease of trading, according to market experts.

ETFs are likely to see an inflow of more than Rs 1,000 crore in July, said Nilesh Shah, managing director of Kotak Mahindra Asset Management Co. and chairman of the Association of Mutual Funds in India (AMFI). Equity mutual funds may see an outflow for the month, he said.

This will be the first monthly outflows since March 2016, according to AMFI data.

Investors are shifting from mutual funds to direct stocks and ETFs lured by the prospect of higher returns, according to B Gopkumar, managing director and CEO of Axis Securities. The average daily trading cash volume has risen from Rs 20,000 crore in FY19 to around Rs 32,000 crore this year and the average age of the investors have also declined, he said.

“ETF flows are a mix of institutional, HNI and retail, and the trend of their folio and AUM accretion is likely to continue in the near term,” according to Lakshmi Iyer, Chief Investment Officer (Debt) and Head Products, Kotak Mahindra Asset Management Company.

Equity flows continue to be net negative for July (month-to-date), she said.

ETF Inflows

Exchange and index funds seemed to have filled the gap in flows caused by equity mutual fund outflows. ETF, index funds, gold ETFs and funds of funds of overseas schemes saw a total inflows of Rs 8,660 crore for the April to June quarter, according to data from the Association of Mutual Funds of India (AMFI).

Experts see the surge in flows as a positive indicator of the gaining acceptance of ETFs. The flows into ETFs and index funds are seeing a steady increase over the years across segments. Large retirements funds such as the EPFO are actively allocating their corpus in ETFs and this bodes well for the long-term health of the markets as these flows are not tactical.

Some estimates point that retirement funds are allocating nearly Rs 2,500 crore per month to ETFs and Index Funds.

However, the baton for index investing seems to have gradually passed on to retailers and pensioners from institutions. So far, passive investing was driven by Employees Provident Fund Organisation, life insurance, and other government disinvestment mandates, but now retail interest is gradually rising, according to Anil Ghelani, Head of Passive Investments at DSP Mutual Fund.

Nippon India Mutual Fund has seen a spurt in investor interest in their ETFs in Q1 of this year. Nippon's investor base has increased by nearly 15 percent in Q1 itself and volumes in ETFs have increased significantly on the exchanges, according to Vishal Jain, Head, Nippon India ETF, who helps manage ETF and index assets worth Rs 27,500 crore.

Country call vs fund call

ETFs and Index Funds are gaining traction because they cost less, are simpler and provide an avenue to invest in the best companies at that point of time, Jain added. "It’s the easiest way to ride on the India growth story."

Consistently delivering outperformance over the benchmark is becoming difficult in case of large cap funds, Ghelani said. Investors look to switch to passively managed ETFs or Index Funds, from large cap funds, even while they retain their allocation for mid and smallcaps via actively managed mutual funds, he added.

The decline in inflows in equity funds is largely due to profit booking by some investors as markets moved up, according to Kaustubh Belapurkar, director of fund research at Morningstar. The ETF inflows are largely from the EPFO allocations which is coming into the NIFTY 50 index and Sensex 30 index ETFs managed by State Bank of India and UTI Asset Management, he added.

Robinhood Syndrome

Retail investors, especially millennials, are investing in the markets amid a coronavirus-induced lockdown in a trend that has swept across the globe. The trend has come to be known as Robinhood trading. In the US and Europe, a new breed of digital tech-savvy traders has emerged in the coronavirus pandemic. Brokers like Robinhood, Charles Schwab, E-Trade and others have disrupted the traditional brokerage system by offering commission-free trading and even free shares on occasion.

Also read: Brokerages lure record number of first-time investors to stock markets with dazzling incentives

The retail fervor has also swept across the ETF market. Retailers are shifting to ETFs from traditional funds as the products offer lower risk through the sector and stock diversifications and significantly lower costs compared to active funds, according to Koel Ghosh, the head of business development for S&P Dow Jones Indices in South Asia.

Not only that. Investors now realise that ETFs offer better return prospects in an atmosphere where bank deposit rates have fallen drastically. Investors can do a mix of active and passive investments to achieve their investment objective with the help of ETFs, Ghosh said.

ETFs are also offering an array of different products like market beta, factor indices and low volatility, she said.

ETF vs Index Funds

As investors flock to ETFs due to a firm belief in the India growth story, some fund houses are trying to expand liquidity to make the experience better for retail investors. DSP Asset Management and Nippon Asset Management are focusing on index funds as they have better liquidity than ETFs.

Retail investors could sometimes find it difficult to get good price discovery on the ETFs due to wider bid ask spreads, according to Ghelani. A high bid-ask spread, and low liquidity could weaken the investor experience, he said.

"While a large institutional investor would realize if spreads are high and possibly wait before the trade, some retail investors, including those investing via an automated platform or robo advisors, might get some trades at unreasonable price levels in some instances," Ghelani said.

While investing in index funds, investors subscribe or redeem at the NAV of the day which is a single official rate declared without any bid-ask spreads involved.

Potential risks

Retail investors are benefitting from the Robinhood phenomenon but they need to be mindful of the risks.

ETFs have got the bulk of their inflows from the corpus of the Employee Provident Fund Organisation. However, the COVID-19 induced lockdown has forced about 8 million EPFO subscribers to withdraw about Rs 30,000 crore between April and July 2020. Such large-scale redemptions may slow the inflows into ETF funds and investors need to be mindful of near-term volatility. (Saurce moneycontrol.com)


Aditya Birla Sun Life AMC onboards over 50,000 investors via video e-KYC during lockdown


Aditya Birla Sun Life AMC on Wednesday said it has witnessed an increase in paperless onboarding of customers, with the asset manager adding over 50,000 new investors with its video e-KYC system during the nationwide lockdown. To provide video e-KYC service, the asset manager had partnered Signzy to leverage its AI-based digital customer onboarding solution.

The technology enables a zero-contact, paperless system that replaces the need for physical submission of KYC (Know Your Customer) documents, Aditya Birla Sun Life AMC said in a statement.

The asset manager said it has already onboarded close to 1 lakh investors to the mutual fund industry with video e-KYC system since its adoption a year ago.

This artificial intelligence and machine learning enabled video e-KYC system replaces the need for document management, providing an ..


Inflows Into Equity Mutual Funds Fall For Second Straight Month In May

Inflows into equity mutual funds fell for the second straight month as benchmark indices remained volatile even as the economic activity continued to resume in phases. Net inflows into equity and equity-linked schemes declined 15% over the previous month to Rs 5,256.52 crore in May, according to data released by the Association of Mutual Funds in India. Net equity inflows had fallen by half in April on lower distributors’ activity amid the lockdown to contain the coronavirus pandemic.

All categories of equity schemes saw a decline. Net investments into the mid caps dropped to the lowest since AMFI started releasing granular data from April 2019. While inflows into large caps fell, they have remained above the Rs 1,000-crore mark for a year. “On the debt side, investors taking advantage of conducive reducing interest rates trend and shift towards high quality AAA-rated has resulted in a steady rise in net flows,” said NS Venkatesh, chief executive officer at AMFI. “Credit risk concerns have ebbed following regulatory support, redemptions have come down and we would see investors allocating higher quantum of savings to high quality debt paper.”
Contribution through systematic investment plans fell to the lowest in nearly a year at Rs 8,123 crore in May. Still, net investments managed to stay above the Rs 8,000-crore mark for 18 straight months. Swarup Mohanty, chief executive officer at Mirae Asset Global Investments Pvt., however, said a 6% drop in SIP from the peak numbers in just two months needs to be noticed. “If the stoppages are due to cash flow issues then it is understandable. If not then the basic concept of rupee cost averaging in SIP has not been understood by the investors,” 

UPDATE ON 27-06-2020

Equity Fund

Large Cap Fund


2. HDFC TOP 100 FUND (G)

3.  DSP Equity Opportunities Fund

4. L&T Large and Midcap Fund

5. ICICI Prudential Large & Mid Cap Fund


Mid Cap Fund

1. Axis Midcap Fund

2. ICICI Prudential MidCap Fund

3. SBI Magnum Midcap Fund

4. L&T Midcap Fund

5. HDFC MID CAP Opportunities Fund


Small Cap Fund

1. SBI Small Cap Fund

2. HDFC Small Cap Fund

3. Axis Small Cap Fund

4. ICICI Prudential Smallcap Fund

5. Nippon India Small Cap Fund


Multi Cap Fund

1. SBI Magnum MultiCap Fund

2. ICICI Prudential Multicap Fund

3. Axis Multicap Fund

4. L&T Equity Fund

5. HDFC Equity Fund


Focus Fund

1. SBI Focused Equity Fund

2. Axis Focused 25 Fund

3. ICICI Prudential Focused Equity Fund - Retail - Growth

4. Nippon India Focused Equity Fund

5. HDFC Focused 30 Fund 



  Mirae Asset Mutual Fund

 1.       Mirae Asset India Equity - (G)

       2.       Mirae Asset SF - Direct (G)

       3.       Mirae Asset Tax Saver Fund - DP (G)





2. SBI Small & Midcap

3. SBI Magnum Multicap Fund (G)


 Aditya Birla sunlife







1. L&T India Large cap


3. L& T India Value fund



1. HDFC Top 200





1. ICICI Pru. focus blue chip.

2. ICICI Pru. Value fund.




1. Relaince Top 200






1. Sundram Select fund

2. Sundram Select Micro

3. Sundram Value Fund




1. IDFC Imperial equity

2. IDFC sterling equity




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