Changing investor preference alters pecking order of Equity MF categories

Sub-categories of equity-oriented schemes have seen a change in pecking order based on assets under management. While the large-cap category has maintained the numero uno position, the equity-linked saving scheme (ELSS) — which offers tax benefit to investors — has risen to the second position. Meanwhile, the rank of the multi-cap category has slipped to four from two last year.

This is because of change in regulations.

Last year, Sebi modified scheme characteristics of ‘multi-cap’ schemes, wherein at least 25 per cent of the corpus had to be invested in large, mid, and small-cap stocks each. It also created a new category called ‘flexi-cap’, which allowed fund managers to dabble across these categories without any minimum investment restriction. As a result, many schemes in the multi-cap category switched to flexi-cap.

Meanwhile, the ‘value fund (contra fund) category, too, has seen its rank slip as market gives more credence to growth stocks over value ones.

Overall, the past one year has been good for the equity segment with assets growth 18 per cent to Rs 9.3 trillion. Sectoral, focussed, and dividend yield categories saw highest percentage growth in assets.