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Aditya Birla Sun Life launches multi-cap fund

Henil Shah
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Aditya Birla Sun Life launches multi-cap fund

Last year, we had seen how most of the multi-cap funds changed their category to the newly-formed category, Flexi-cap fund. This was done amid the Securities & Exchange Board of India (SEBI) changing the rules of multi-cap funds. According to new norms, multi-cap funds at all times should have a minimum of 25 per cent each in large-cap, mid-cap, and small-cap stocks. This was done in order to make a multi-cap fund stick to its true label. Due to this, many multi-cap funds have shifted to the new category. At the same time, few funds remained in the multi-cap category. Therefore, in time to come, most of the asset management companies (AMC) are likely to introduce their multi-cap funds.  

Aditya Birla Sun Life mutual fund recently has launched its multi-cap fund under the name, Aditya Birla Sun Life Multi-Cap Fund. The new fund offer (NFO) is open for subscriptions up to May 3, 2021. Let’s understand what it has to offer. 

Aditya Birla Sun Life Multi-Cap Fund is an open-ended equity scheme investing across large-cap, mid-cap, and small-cap stocks. As said earlier, the multi-cap category is mandated to invest at least 25 per cent in each of the three market cap segments of large, mid, and small-caps. This well-defined and disciplined market cap allocation is likely to help invest in fast-growing sectors and companies from across the spectrum, with a proper balance between the risk-reward proposition and relative safety of large-caps. The fund is said to offer a well-curated portfolio of high conviction stock ideas, with a focussed and bottom-up stock selection approach. 

Commenting on the launch, A Balasubramanian, MD & CEO of Aditya Birla Sun Life AMC Limited said, “Large-caps are proven quality compounders and must-haves for any portfolio but from a long-term perspective while a healthy exposure to mid and small-cap segment is proven to be growth enhancers and rewarding. Aditya Birla Sun Life Multi-Cap Fund combines the power of all three to offer a curated portfolio of high conviction stocks across the three market caps. The fact that one can invest in this through SIPs, make it a convenient way to participate in India’s long term growth story”. 

In a low-interest-rate environment, where traditional savings instruments are likely to give sub-par returns, equity is the most favourable asset class for wealth creation purposes. Within this, a multi-cap approach enables diversification by way of allocation to all the three market caps with one fund. Now, it would be interesting to see how this fund is managed or switches from large-caps to mid-caps & small-caps and vice versa.

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