Sebi, in a recent circular, has tweaked the asset allocation rules for multi cap funds on Friday. According to the Sebi circular on 'Asset Allocation of Multi Cap Funds', the changes in the portfolio allocation of multi cap schemes have been done to bring diversification. The circular read, "In order to diversify the underlying investments of Multi Cap Funds across the large, mid and small cap companies and be true to label, it has been decided to partially modify the scheme characteristics of Multi Cap Fund." Here are the five points to explain the change in the asset allocation rules of multi cap funds:1. Currently, the portfolio of most multi cap funds is biased towards large caps with 65% to 90% of their portfolio in large cap stocks.

Source: Mint September 12, 2020 00:36 UTC