 "SBI MF re-classifies, categorise schemes; gives exit option to unit holders")
SBI Asset Management Company has re-classified and categorised its several schemes, a move that will reduce clutter and make it simple to compare performance of various other mutual fund schemes.
Besides, the fund house has given the exit option to existing investors.
The move is part of the fund house effort to comply with markets regulator Sebi's directive.
In a letter to investors, the fund house said, "Certain changes will be carried out in the features of some of our schemes, resulting in changes in fundamental attributes of certain schemes of SBI Mutual Fund (MF)".
Some of the existing schemes that will see changes are -- Magnum Equity Fund, Magnum Multiplier Fund, Emerging Businesses Fund, FMCG Fund, IT Fund, Pharma Fund and Corporate Bond Fund.
The fund house said that the proposed changes in type of scheme, investment objective, asset allocation and investment strategy amount to change in the fundamental attributes of the scheme.
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Accordingly, existing unitholders, who are not in agreement with changes, will have the option to redeem or switch their units at applicable net asset value (NAV) without any exit load.
The option to exit without payment of exit load will be valid from April 16 to May 15. Such exit option will not be available to unit holders, whose units have been pledged.
"Any redemption or switch request received after May 15 will be subject to the prevailing load structure as applicable and will not qualify for the waiver of the exit load," it added.
Further, it said that no action is required in case unit holders are in agreement with the change .This offer to exit or switch is merely an option and is not compulsory.
"Redemption/ switch-out by the unit holders due to aforesaid change or due to any other reasons may entail tax consequences. Unit holders are advised to consult their tax advisor for the same," the fund house said.
In a bid to reduce the number of schemes in mutual funds, Sebi, in October, came out with uniform definitions for fund categories. The move is applicable only on open-ended funds being offered by the fund houses.
The market regulator broadly divided mutual funds into five categories- equity funds, debt funds, hybrid funds and solution-oriented funds and other funds. It had asked fund houses to adhere to these guidelines within two months in letter and spirit.