Multi-cap funds must invest 25% each in small, mid, large-cap stocks: Sebi

As a result, a lot of multi-cap schemes' investment were skewed towards the large-caps

The Securities and Exchange Board of India (Sebi) has tweaked the definition of multi-cap schemes offered by mutual funds (MFs), a move that could trigger a churn in holdings worth Rs 65,000 crore.

The regulator has increased the minimum investment threshold in equity and equity-related instruments. It is now between 65 and 75 per cent of the fund’s corpus. 

More importantly, it has mandated that at least 25 per cent of the fund’s corpus should be deployed in large-caps, mid-caps and small-caps each.

Essentially, if a fund’s corpus is Rs 100, a multi-cap scheme will now have to invest at least Rs 25