SBI Small and Midcap Fund Reopen for SIP Should You Invest

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SBI fund that generated 35% return in a year to reopen for investment • However, the fresh investment will be only for investment through systematic investment plan (SIP) mode and there will be a cap of Rs 25,000 per month per PAN card on fresh investments • he SBI Small Midcap Fund, which has generated 35.2 per cent one-year return (As of May 7, 2018) outperforming the category average by a whopping 23 per cent, will reopen for fresh subscription from May 16, The Economic Times reported. However, the fresh investment will be only for investment through systematic investment plan (SIP) mode. It will be called SBI Smallcap Fund and there will be a cap of Rs 25,000 per month per PAN card on fresh investments. The fund had stopped accepting fresh investments since October 2015.According to the ET report, SBI Small Midcap Fund is the first fund to reopen for fresh subscriptions after many small-cap funds had put restrictions on inflows because of rising inflows, higher valuations and lower investment opportunities. It was closed for subscription since it had a capacity constraint of Rs 750 crore on its assets under management. • However, after the introduction of new rules by the Securities and Exchange Board of India (Sebi) for rationalisation of mutual fund schemes, the fund will now fall in the small cap category. The erstwhile SBI Small Midcap Fund had emerged from the acquisition of the Daiwa Industry Leaders Fund by SBI in November 2013, the ET report said.As per the revised rules of Sebi, a small cap fund can now buy stocks beyond the 251st stock in terms of market capitalisation, compared to the 401st stock in terms of market capitalisation earlier. “These new norms give us 150 more stocks to choose from with higher market capitalisation and hence and we are in the final process of taking internal approvals for opening the scheme for SIPs only,” the ET report quoted DP Singh, executive director, SBI Mutual Fund as saying.According to the latest factsheet, SBI Small Midcap Fund has an asset under management (AUM) of Rs 771 crore. The fund is managed by R Srinivasan and is among the best performing smallcap funds in India. The fund has generated a 3-year and 5-year CAGR of 24.70 per cent and 36.01 per cent respectively outperforming the category average by a wide margin. Westlife Development is the top holding in the fund followed by Kirloskar Oil and Techno Electric and Engineering. • Investors have been flocking to mid-cap and small-cap schemes in the past three years owing to higher returns from such schemes. Several funds in these categories have placed restrictions on inflows because the available stocks are limited and liquidity is low • To umeed hai apko ye video pasand ayega • Facebook: / marketmaestroo • Twitter : / marketmaestroo • : / marketmaestroo • For any BUSINESS INQUIRY - [email protected]

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