ICICI Pru MF curbs flows into mid, small-cap funds – Times of India

by The Technical Blogs


MUMBAI: ICICI Prudential Mutual Fund on Tuesday said it will not accept any fresh investment in mid-cap and small-cap funds, effective March 14 until further notice. I-Pru MF joined a long list of fund houses that have over the last few months stopped inflows into small-cap funds.
Some fund houses have suspended inflows into mid-cap funds, too. These decisions have been taken to insulate investors in these funds from excessive market volatility and loss in value of investments in case of sudden slide in stocks from these market segments of the market.
On Monday, Sebi chief Madhabi Puri Buch had also flagged about froth building up in mid and small-cap funds, referring to high valuations. The regulator had also, through MF industry trade body Amfi, alerted fund houses to strengthen their risk management mechanisms relating to schemes belonging to these categories to safeguard investors.
Sebi chairperson has also announced that the regulator is currently carrying out stress testing for mid-cap and small-cap funds, and the results would be out this Friday.
On Tuesday, I-Pru MF said that it was suspending fresh and additional purchases of units of these two funds through lump sum mode and also switch-in options from any other schemes of the fund house. Fresh registrations through SIP mode and systematic transfer plan, however, shall continue but the upper limit will be capped at Rs 2 lakh per PAN per month in each scheme. In quarterly SIP, this limit is enhanced to Rs 6 lakh, while in daily SIP it’s capped at Rs 10,000. The fund house also said that some special products and features like freedom SIP, SIP top-up facility, booster SIP, etc, “will not be available for fresh SIPs/STPs registered in the schemes”.


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