1. As far as equity fund investors, and fund managers, are concerned, Sebi has now made the selection process of underlying scrips in various funds very easy.
2. In order to ensure uniformity of the equity universe, large cap, mid cap and small cap have now been defined by Sebi as follows:
a) Large Cap: 1st -100th company
b) Mid Cap: 101st -250th company
c) Small Cap: 251st onwards
as per full market capitalization.
3. This list, prepared by AMFI, will be updated every 6 months, as per market cap data of June end and December end, and made available on its website within 5 days.
4. It means that if a company is 1-100, 101-250 & 250+ position in this six-montly list, it will be called large cap, mid cap & small cap stock, whatever its own market cap size may be.
5. Therefore, fund managers will have to review and reconstruct the stock composition of funds accordingly, for realignment wherever required, as per Sebi's categorywise mandates.
6. With Sebi's new definition of the equity universe, highest number of stocks will be small cap, as there are more than 1000 companies in NSE alone, and fund managers in this category will never fall short of stocks or variety to select from, irrespective of their market cap size growth.
7. Even with this change in definition for stock selection, if any small cap fund still closes its subscription for whatever reason, it reflects on the fund management's inability to research and "discover" potential "gems" for its investors who have consciously invested for a higher risk-related alpha at a higher TER.
8. Such investors should, therefore, shift their allegiance elsewhere, for garnering more respect for their conscious risk-return strategies, instead of suffering a fund's injustice in an era where customer should truly be the king.
9. Just for info:-
a) Large cap universe of 100 stocks has around 80 large cap funds,
b) Mid cap universe of 150 stocks has around 45 mid cap funds, and
c) Small cap universe of 750+ stocks has around 15 small cap funds.
10. It also reflects on the inability of AMCs / Amfi / Sebi (as of now) to make equity funds more broadbased.
2. In order to ensure uniformity of the equity universe, large cap, mid cap and small cap have now been defined by Sebi as follows:
a) Large Cap: 1st -100th company
b) Mid Cap: 101st -250th company
c) Small Cap: 251st onwards
as per full market capitalization.
3. This list, prepared by AMFI, will be updated every 6 months, as per market cap data of June end and December end, and made available on its website within 5 days.
4. It means that if a company is 1-100, 101-250 & 250+ position in this six-montly list, it will be called large cap, mid cap & small cap stock, whatever its own market cap size may be.
5. Therefore, fund managers will have to review and reconstruct the stock composition of funds accordingly, for realignment wherever required, as per Sebi's categorywise mandates.
6. With Sebi's new definition of the equity universe, highest number of stocks will be small cap, as there are more than 1000 companies in NSE alone, and fund managers in this category will never fall short of stocks or variety to select from, irrespective of their market cap size growth.
7. Even with this change in definition for stock selection, if any small cap fund still closes its subscription for whatever reason, it reflects on the fund management's inability to research and "discover" potential "gems" for its investors who have consciously invested for a higher risk-related alpha at a higher TER.
8. Such investors should, therefore, shift their allegiance elsewhere, for garnering more respect for their conscious risk-return strategies, instead of suffering a fund's injustice in an era where customer should truly be the king.
9. Just for info:-
a) Large cap universe of 100 stocks has around 80 large cap funds,
b) Mid cap universe of 150 stocks has around 45 mid cap funds, and
c) Small cap universe of 750+ stocks has around 15 small cap funds.
10. It also reflects on the inability of AMCs / Amfi / Sebi (as of now) to make equity funds more broadbased.