Stocks

SBI Mutual Fund opens its small cap fund for fresh investment after four years

Our Bureau Mumbai | Updated on March 29, 2020 Published on March 29, 2020

 

 

SBI Mutual Fund has reopened its small cap fund for lumpsum investment after a gap of over four years.

Though other forms of investment such as Systematic Investment Plan (SIP) and Systematic Transfer Plan (STP) in the fund are allowed, the lumpsum investment was stopped due to sharp inflows triggering the internal limit set by the fund house. Fresh investment in the fund was stopped from October 30, 2015.

Starting Monday, the fund house will allow lumpsum investments in the small cap fund till its receives net inflow of up to ₹1,000 crore from the date of opening the scheme for lumpsum subscription.

Fresh registration through SIP and STP, individually or cumulatively, shall be allowed for a maximum of upto ₹25,000 per PAN for monthly, quarterly, semi-annual and annual frequency.

Fresh registration through weekly SIP/STP-in individually or cumulatively, in the scheme will be capped at ₹6,250 per installment, leading to capping the total amount via weekly SIP / STP-in at ₹25,000 per month per PAN (first holder/guardian PAN).

The fund has outperformed its benchmark S&P BSE Small Cap TRI (total return index) and Category (Equity Small Cap) over the one, three, five, seven and ten years.

Reopening the SBI Small Cap for fresh învestment will give investors an opportunity to take advantage of the current market valuations.

R Srinivasan, Head of Equity, SBI Mutual Fund said the fund was closed for fresh investment after it hit the limit of ₹750 crore set in the offer document.

Market regulator SEBI’s ‘Categorisation and Rationalisation of MF Schemes’ norms increased the capacity for the fund as it was higher than the internal definition set by the fund house, he said.

Following this, SIP in the scheme was opened mid-2018 and since then the fund AUM has grown from about ₹800 crore to ₹3,500 crore by February-end, before the sharp fall,” he added. Year-to-date, small cap stocks have fallen over 30 per cent due two consecutive years of negative sentiment.

“While the current crisis is scary, we believe, valuations are tempting. Hence, we have taken approval internally for opening up the fund for fresh învestment with enhanced inflow limit,” said Srinivasan who had managed the fund since 2013.

Published on March 29, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.