• OUTLOOK ARENA
  • SEPTEMBER 14, 2020

Will Bluechips Lose Luster After 25-25-25 Directive for Multicap Funds?

If you were tuned in to stock market updates over the past weekend, I am sure you must have come across the piece of news that caused a flurry. What happened was that the stockmarket regulator introduced a new set of directives of asset allocation for multicap funds.

The new directive for multicap funds seems to be taking away the asset allocation flexibility that the fund managers enjoyed. Also, it does not seem to be an 'all weather' solution.

Funds will find it rather difficult to stick to the suggested allocation as and when smallcaps get too expensive or too risky.

It is widely expected that this directive will lead to a rally in mid and smallcaps in the near term...with as much as 40,000 crores finding its way to small cap funds in next four months.

However, will bluechips lose their luster with this trend? And is the trend to stay?

I will answer that in this video...

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