LIC Mutual Fund has unveiled the LICMF Multicap Fund, an open-ended equity scheme targeting industry leaders across large, mid, and small capitalisations.
In a press statement on September 29, the fund house said the new fund (NFO ) offer would open on October 6 and close on October 20, and it will reopen for ongoing subscription from November 2.
LIC MF Multicap Fund would invest a minimum of 25 per cent in each market cap segment, and the remaining corpus would be allocated at the fund manager’s discretion. The fund house said the fund manager would have flexibility in using the 25 per cent corpus following a disciplined approach.
Key Features
The fund would follow the Macro Based Valuation Check (MVC) method, developed in-house, to adjust stock allocation in the portfolio based on the evolving macroeconomic variables. It will also consider equity risk premium, interest rates, and earnings growth.
The fund house explains that its unique investment framework calculates the adjusted market valuations by taking macro cues. It involves calculating the lower-end and higher-end price-to-earnings (PE) to determine the optimum portfolio-level PEG band (price/earnings to growth ratio).
Announcing the scheme, T.S. Ramakrishnan, managing director (MD) and chief executive officer (CEO) of LIC Mutual Fund, said: “LICMF Multicap Fund would offer investors prudent and disciplined diversification across market caps and an opportunity to invest in those companies which have leadership position across market caps. The uniqueness of LICMF Multicap Fund would be a unique investment checklist, which aims to identify emerging leaders across all market caps.”
The fund plans to adopt qualitative and quantitative frameworks for stock selection and market allocation. Chief information officer (CIO), Equity, Yogesh Patil, said the “MVC framework is an essential guardrail to avoid traps of overvaluation without sacrificing growth opportunities.” He added that it would continually add another layer of check for portfolio monitoring.
The fund house said that the LICMF Multicap Fund would track the NIFTY 500 Multicap 50:25:25 TRI that factors in all caps, offering more diversification and appropriate comparison for the scheme.
