Invesco Mutual Fund launches flexi-cap fund

In November 2020, the Securities and Exchange Board of India (Sebi) had launched a flexi-cap category, requiring funds under this classification to invest at least 65% of their corpus in equity but without any restrictions on whether they can invest in large-, mid-, or small-cap stocks.

This came after the markets regulator in September introduced new norms for asset-allocation rules for multi-cap funds, mandating a minimum 25% allocation each in large-, mid-, and small-cap stocks.

Following the changes in rules, most funds moved to the flexi-cap category, with just a few funds choosing to stay in the restrictive multi-cap category.

As per the asset management company, Invesco India Flexi Cap Fund will adopt a mix of top-down and bottom-up approaches to select stocks. Further, the allocation between large-, mid- and small-cap stocks will be based on relative valuations, business cycles and other macroeconomic indicators.

The scheme will be benchmarked to the S&P BSE 500 Total Return Index (TRI) and will be managed by Taher Badshah, who has over 27 years of experience in the Indian equity markets.

The minimum investment amount during the new fund offer (NFO) is ₹1,000, and in the multiples of Re 1, thereafter. The scheme will remain open for subscription till 7 February. For a systematic investment plan (SIP), the minimum application amount is ₹500, and in the multiples of Re 1, thereafter.

No exit load will be charged if up to 10% of the units are redeemed or switched out within one year from the date of allotment. If more than 10% of the units are redeemed or switched out within one year from the date of allotment, an exit load of 1% will be charged. No exit load will be charged after one year from the date of allotment.

Saurabh Nanavati, chief executive officer, Invesco Mutual Fund, said, “While equity markets offer the opportunity, they are often very unpredictable. Macroeconomic policies, corporate earnings, interest rates, global and domestic events have an impact on equity markets. Companies belonging to different market caps usually vary in performance over certain time periods. Therefore, diversifying your investments across market caps, preferably through a Flexi-cap Fund, can reduce portfolio risk and mitigate volatility, thereby maximizing portfolio returns over the long term.”