Edelweiss Mutual Fund on October 4, 2023 announced the launch of Edelweiss Multi Cap Fund, an open-ended scheme that will invest across large-, mid-, and small-cap stocks, and will be benchmarked against NIFTY 500 Multicap 50:25:25 Index TRI.
The new fund offer (NFO) opened for subscription on October 4 and will close on October 18, 2023.
The minimum application amount will be Rs. 5,000 in the lump sum mode and in multiples of Re. 1. For systematic investment plan (SIP), the minimum investment amount will be Rs. 100 and in multiples of Re. 1 thereafter.
According to Edelweiss Mutual Fund, the primary objective of Edelweiss Multi Cap Fund is to generate long-term capital appreciation by investing in a diversified portfolio of equity and equity-related instruments across large cap, mid cap and small cap stocks.
The fund will allocate a minimum of 25 per cent and a maximum of 50 per cent to each large-cap, mid-cap, and small-cap categories. The total allocation in equity and equity-related instruments, encompassing all three types, will be between 75 per cent and 100 per cent.
Investment in debt and money market instruments, if any, will be limited to 25 per cent. The fund might also invest in units issued by Reits and InvITs, subject to a maximum of 10 per cent.
According to Edelweiss Mutual Fund, the scheme will have defined allocation ranges to prevent any bias towards any specific market. It will also be sector agnostic.
The mutual fund house will also forensic framework and prioritise reasonably priced businesses with medium-term earnings potential, Edelweiss Mutual Fund said in a press statement. “The investment approach will remain style-agnostic, focusing on well-managed companies with scalable opportunities and superior return on capital employed, aiming for sustained long-term returns,” it said.
According to Edelweiss Mutual Fund, the large cap segment consists of proven leaders, while the mid-cap and small consists of emerging giants and rising champions, respectively.
Opportunities are expanding rapidly in the mid and small cap sectors, both of which incidentally remain relatively under-researched. The majority of the companies in the realty, industrial products, auto components, capital markets, healthcare services and consumer durables are in the mid-cap and the small-cap space, it added.
Also, multi cap funds have a structural advantage over other categories in delivering alpha.
Radhika Gupta, managing director and CEO, Edelweiss Mutual Fund, said: “India is set to embrace a promising decade of growth, driven by a dynamic and affluent young demographic, a thriving digital economy, improving exports, infrastructure enhancements, and improved credit accessibility. We believe that our experience in successfully managing mid and small-cap strategies over the last 15 years through bottom-up stock picking will prove to be an edge while managing a multi-cap fund, which has a higher tilt towards this segment.”