Since the sebi announced changes in the previous Multicap from January 2021 , Most of the fund houses have converted it to Flexi cap catagory . As seen in the old multicap the name sounds to be having investment in all the catagory in equal proportions but actually in most schemes main holding were Largecaps . This lead sebi to revise the structure of this catagory . After these changes now the latest Multicap catagory has option to invest 25 % each in Large / Mid / Small catagory and remaining portion can be invested in any of the catagories or the amount can be invested in Debt portion . The maximum exposure to small cap is limited to 50% .
Since past 8-10 Months different fund houses have launched various schemes . Even Sbi Amc has done the same . Its recent launch of balance fund got very huge reponse based on it timing and over all market sentiments . Now will the same trend repeated for the SBI MULTICAP FUND ? the answer to this will be know as time passes . Still if we think about Current market conditions and evaluate whether this fund will be good bet or not , Here are some points -
As the covid fear gradually fades , all world opens up , it was welcomed by the investors around the world . Most of the world markets Hit Highs and still near to it . But as things opens fastly the concern of the inflation starts to rise , May be it can be short term spike if we consider the human behaviour . For past 2 years people were not allowed to live their regular life , restricted them for not doing things they were doing for past so many years . Now , suddenly after opening up every one started running for things which they missed so it might have caused rise in the price of certain items . It has resulted in the cues of rising interest rates from central banks . Since , past couple of months FII were mostly on selling side , Even the amount of Sips has dropped during past 6 months compared to what it was last year . In addition to this the recent tensions between Russia and ukrane lead more uncertainies to the global equity.
If we talk about this Fund in such time -
the markets are some what lower than highs , Specially largecaps from selected sectors , Mid caps / small caps are still away from their lows and appears to be holding themselves well as of now .
As this will be actively managed fund and the experience sbi team has so far in managing money at turbulent time , it gives advantage to them
In our View as the allocation flexibility is higher this fund can be Good one for people who are staring first time , Or want to built gradual portfolio and wealth for longer term . This fund can give you the stability of the large cap funds , Volatility of the Small cap fund and Appreciation of the midcap funds . More over it can have better freedom to manage cash in Hard times of the market .
The fund house has their own methodology behind the stock selection process for this scheme and like other schemes of sbi amc it will help them in picking Good stocks at better prices.
I have seen New investors Running behind the small cap counters after seeing their past performances , Those who were lucky able to see valuation of their portfolio at High but not able to exit at Right time and loosing the appreciated value as the momentum cool offs . So for volatile markets fund like this can proved to be a Good bet , And you can start with Nice amount of Sips , Adding Topups whenever possible to boost the invested amount is Good approach suggested in SBI MULTIPCAP FUND