Following SEBI's directions on changes in multicap schemes, Kotak Mahindra Asset Management Company (KMAMC) on Wednesday renamed its Kotak Standard Multicap Fund as Kotak Flexicap Fund.
Peeved at fund houses allocating a bulk of multicap fund investments to large cap stocks, the Securities and Exchange Board of India (SEBI) had in September asked fund houses to ensure that at least 25 per cent of the assets under management are invested in small cap, mid cap and large cap stocks each.
The move to rename the fund is in line with SEBI's categorisation for investment by multicap funds, KMAMC said in a release.
Flexicap funds are required to have a minimum of 65 per cent of their assets in equity and equity-related investments with no cap on how much should be invested in large, mid, or small caps.
"The underlying investment process, portfolio composition and expectations of risk/return remain the same, thus assuring investors of continuity of our investment philosophy and approach," said KMAMC President and CIO Harsha Upadhyaya, who also manages the fund.
Renaming the fund as a flexicap fund will give additional flexibility to choose between various market capitalisation buckets, he added.
"The fund will continue to follow the top-down sectoral approach supplemented by bottom-up stock picks. The fund will also continue to take concentrated sector allocation diversified at a stock level. The current portfolio has a right mix of cyclical and defensive stocks, and the large-cap allocation is approximately 3/4th of the total corpus," the statement said.