Changing Caps In The MF World

A recent decision by the securities regulator came as a mild earthquake for many in the mutual fund industry and a big surprise for millions of investors as multi cap funds are supposed to contain a mix of all three major categories - large, medium and small cap shares. The bulk of the money in equity funds comes from ordinary investors because institutions and companies usually prefer debt funds. They are also those with the insufficient capability to assess a plethora of mutual fund schemes sold through high-pressure marketing and require a greater protection from the regulator. At stake are funds that are worth at least Rs 35,000 crore. The Securities and Exchange Board of India (Sebi) found that major Asset Management Companies (AMCs) were investing 70 to 80 per cent of funds in just one category - shares of large and influential companies - allocating very little to other...