Fund houses join rush

Medium and small-sized enterprises are on the investment radar of the fund houses, as more asset management companies line up close-ended schemes, aiming to explore the vast investment opportunity lying with the mid and small-cap stocks.

Principal PNB AMC is the latest entrant to this group, as the fund house today announced launch of its maiden small and mid-cap equity scheme.

Earlier, Sundaram Paribus had come with two schemes, focussing investment into mid and small-cap catagory, while JM Financial mutual fund has filed draft application for a similar fund.

Around more than 30 per cent companies in the stock market belong to the non-large cap catagory, which the fund managers are finding attractive to invest as these stocks provide more options and large number of sectors to chose from.

Principal PNB Long Term Equity Fund - three year plan - series one, is a close-ended scheme, which would turn into an open-ended scheme on maturity.

The company recognises firms having market capitalisation less than Rs 3,500 crore as mid-cap and stocks with capitalisation lower than Rs 600 crore as small-cap.

"To begin with, we would invest 65 per cent of the corpus into small and mid-caps, rest could be primarily put into large caps and its exposure could go down, as we identify better options in the mid and small cap space," R Shrinivasan, who would be the fund manager for the scheme said.