SBI Multi-Cap Fund; A Different Stock Selection Strategy

SBI Mutual Fund’s new scheme, “SBI Multicap Fund,” was launched after its NFO subscription on 08th March 2022. Mutual fund investors poured a lot of money into the fund; investment advisors also expect this fund to create a fortune for their clients.

Before dwelling on the reasons for higher expectations, let us check out the fundamentals of the SBI Multicap Fund.

SBI Multicap Fund (SBIMCF) is an open-ended fund with a minimum investment of Rs.5,000/- for Lumpsum and Rs.1,000/- for SIP and additional purchases. SBIMCF has no entry load but carries an exit load of 1% - for withdrawals over 10% in the first year of the investment in the fund.

The scheme will be benchmarked to the index, NIFTY 500 Multicap 50:25:25 TRI.

The SBI Multi-Cap Fund is managed by Mr. Mohit Jain and Mr. R Srinivasan, along with the SBI Balanced Advantage Fund and the popular SBI Focussed Equity Fund. Mr. Mohit Jain acts as a dedicated fund manager for overseas investments made through the scheme.

Asset Allocation Pattern:

SBIMCF will allocate 75% of the total corpus to large, mid, and small-cap companies (a minimum of 25% each), while the remaining 25% of the AUM is invested as per the fund manager’s view across market caps.

An Interesting Feature; Its Investment Strategy:

Unlike most of the funds that follow sectors or financial ratios for stock selection, SBI Multicap Fund will follow a bottom-up approach to choose companies across sectors; this helps in a detailed emphasis on individual companies, thereby eliminating sectoral or investment style bias in the selection of stocks.

The fund may also choose to select overseas stocks up to 25% of the total investment.

Thus, giving the global exposure and quality stocks to its unitholders, SBI Multicap Fund collected more than Rs.6,000/- Crore AUM during its NFO period.

Before discussing the expected fund performance of SBI Multi-Cap Fund, we would like to give you a glimpse of the performance of other funds managed by fund managers of SBI Multi-Cap and returns fetched by the scheme’s benchmark Nifty 500 Multi-Cap 50:25:25 TRI.

As per the above data, we expect SBI Multi-Cap is equipped with all the abilities to beat the returns of its benchmark, ranging from its stock selection approach to its fund managers’ efficiency.

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