Kotak MF moves multicap fund to newly-created flexicap category

Kotak Mahindra Mutual Fund has moved its ‘multicap’ scheme to the newly-created ‘flexicap’ segment. The move will help the fund house retain the portfolio composition.

In a statement, Kotak MF said it is re-naming of Kotak Standard Multicap Fund to Kotak Flexicap Fund. As on January 2021, Kotak Flexicap fund had assets of Rs 32,400 crore, making it one of the largest scheme in the category.

Last year, the Securities and Exchange Board of India (Sebi) modified scheme characteristics of ‘multicap’ schemes, wherein at least 25 per cent of the corpus had to be invested in large, mid, and small cap stocks each.

The regulator later created a new ‘flexicap’ category, which allowed fund managers to invest across the largecap, midcap and smallcap buckets without any minimum threshold.

 

Other houses such as Axis MF, Motilal Oswal MF and PPFAS too have moved their multicap schemes to the flexicap category.

To comply with the new definition, existing multicap schemed would have had to undergo large-scale churn.

“Renaming the fund as Kotak Flexicap Fund, gives an additional flexibility for us to choose between various market capitalisation buckets,” said Harsha Upadhyaya, President & CIO – Equity, Kotak MF Mahindra Asset Management Company, who also manages the fund.

The fund house said the scheme “will continue to follow the top-down sectoral approach supplemented by bottom-up stock picks. The fund will also continue to take concentrated sector allocation diversified at a stock level.”

Kotak MF has also filed the offer document with Sebi to launch a new multicap scheme.

Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd