If you have been wondering what are multi cap and flexi cap funds, you can refer to SEBI’s product categorization circular issued in Oct 2017 that came into effect in June 2018. This circular allowed multicap funds to invest 65% of their assets in equity and equity related instruments across large cap, mid cap and small cap stocks. In Sept 2020, SEBI mandated multicap funds to maintain an exposure of atleast 25% each in large cap, mid cap and small cap stocks with the aim of providing greater diversification to multi cap fund investors. However, this limits the fund manager’s ability to leverage opportunities based on his/her outlook because at times it may be necessary to underweigh a particular segment that is expected to
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