Axis Mutual Fund has renamed its Multicap scheme to Flexicap Fund due to new directives from market regulator Securities and Exchange Board of India (SEBI). After this change, Axis Mutual Fund will not be compelled to follow the market cap rules in the new category. That is, the fund house will get a flexible approach for allocation under this scheme by moving the investment to a new category. This new category will be effective from 31 January 2021 next year.
Earlier, a circular was issued by the capital markets regulator Securities and Exchange Board of India (SEBI) for the fund houses to invest multicap funds in large-cap stocks. According to this circular, it will now be compulsory for fund houses to invest 25 per cent in small, mid and large cap stocks. As per Sebi’s rule, Axis Multicap Fund would have had to increase mid-cap exposure by 14.3 per cent and small-cap exposure by 16.1 per cent.