LIC Mutual Fund on Thursday announced the launch of LICMF Multicap Fund (“LICMF Multicap”), an open-ended equity scheme, which would invest across all market capitalization categories.
LICMF Multicap Fund would invest a minimum of 25 percent each in large, Mid and small cap stocks, with the balance of 25 percent providing flexibility to the fund manager to invest across market capitalization, at his discretion following a disciplined approach.
The New Fund Offer (NFO) will open on Thursday, October 6, 2022, and would close on Thursday, October 20, 2022. The scheme would reopen for ongoing subscription from Wednesday, November 2, 2022.
The fund manager for LICMF Multicap Fund would be Yogesh Patil.
LICMF Multicap Fund will embed focused allocation of stocks with all the three market caps -- Large, Mid and Small-- thereby always offering a disciplined diversification, the company said.
The key differentiator for LICMF Multicap Fund would be its in-house developed Macro Based Valuation Check (MVC), adjusting the allocation of chosen stocks within the portfolio, in line with the evolving macro variables by taking into consideration - equity risk premium, interest rates and earnings growth.
The unique investment framework would calculate the adjusted market valuations by taking macro cues. It entails calculating lower-end and higher-end PE and arriving at an optimum portfolio-level PEG Band.
Speaking on the occasion, T S Ramakrishnan, MD&CEO of LIC Mutual Fund, said: “Disciplined diversification and focused allocation are the two aspects investors prefer. LICMF Multicap Fund would precisely 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 aim to identify emerging leaders across all Market Caps.”
Yogesh Patil, CIO-Equity, said: “LICMF Multicap Fund would adopt a robust qualitative and quantitative framework for stock selection and market cap allocation. The key differentiation and value add would emanate from how, the framework would adjust the allocation in line with changing macro variables, to maintain a strict Valuation Discipline using our in-house framework of MVC (Macro Based Valuation Check).”
“MVC framework is essential guardrail to avoid traps of overvaluation or bubbles without sacrificing the ability to participate in growth opportunities,” Patil said adding: “MVC would actually add another layer of check for portfolio monitoring on a continual basis.”
LICMF’s approach to multicap strategy would be driven by the philosophy of sticking to the investment in companies potentially emerging as winners, and an endeavour to identify Industry leaders across market caps having strong moat and scalable business.
The first-tier benchmark for the LICMF Multicap Fund would be NIFTY 500 Multicap 50:25:25 TRI, which factors in all caps and thus offers more diversification and appropriate comparison for the scheme.
