The curbs come a day after Sebi chairperson Madhabi Puri Buch pointed out that there is a danger of potential “froth” or “bubbles” in market.
ICICI Prudential Mutual Fund said that it will not accept lump sum money in its mid- and small-cap schemes from March 14. The curbs come a day after Sebi chairperson Madhabi Puri Buch pointed out that there is a danger of potential “froth” or “bubbles” in market which has traditionally favoured by retail investors. With this ICICI has become the first fund house to stop lump sum investments in a mid-cap fund although Nippon, Tata and SBI MFs have stopped lump sum investments in their small-cap schemes.
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ICICI Pru decision: Is this a first?
ICICI said in its notice that it will not accept any fresh subscriptions through lump sum mode. Additionally, it also stopped switches into both its mid-cap and small-cap funds but will continue to take fresh registrations through systematic investment plans (SIP) and systematic transfer plans (STP). There will be a limit of ₹2 lakh per PAN level per month per scheme, it said.
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ICICI Pru decision: What it said in notice?
The notice read, “Keeping the interest of the investors protected from sudden market movements, the trustees have decided to temporarily discontinue subscriptions in the Schemes,” said the fund house in a notice to investors. The AMC may accept lump sum subscriptions … in the schemes at a future date when in its assessment the valuations become attractive and fresh approval shall be sought from the Board of Trustee in this regard at that time.”
Performance of small cap and mid cap funds in one year
The S&P BSE 250 Small Cap TRI (Total Returns Index) rose 55.53% in the past one year. The S&P BSE 150 Midcap TRI has surged 54.24%, while Nifty rose 29.22%. Current share of mid and small cap stocks in the total market cap is 36.4%.
ICICI Pru decision: ICICI fund performance in one year
ICICI Prudential Midcap Fund has returned 50.52% in one year while ICICI Prudential Smallcap Fund has increased 42.6% in the same period.
