SEBI Introduced New Large & Mid-Cap Category Mutual Funds.

This is a new category introduced by SEBI. These schemes will invest in both Largecap and Midcap stocks. These schemes would invest at least a minimum of 35% in largecap companies and 35% in midcap companies.

According to the revised norms, largecap funds will henceforth invest atleast 80% of their corpus in the top 100 listed stocks by market capitalisation. Midcap schemes, on the other hand, will be mandated to put at least 65% of the total assets in companies ranked between 100-251st in the market cap terms.

The new large and midcap category is being positioned between these two broader segments. These funds will be required to hold a minimum 35% of the corpus in largecap companies while another 35% will have to be deployed in midcap companies.

This means will still need to do a lot of homework to pick the right scheme. For instance, Mirae Asset Emerging Bluechip may possibly find itself in the same basket as DSP Blackrock Equity opportunities, SBI Magnum Multiplier and Kotak opportunities among others. While the former is more tilted towards midcaps others are biased towards largecaps. This could pit funds with different risk profile against each other.