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

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