Fresh investments in SBI Small and Midcap Fund

SBI Small and Midcap Fund is not accepting new purchases. I am currently investing ₹500 every month in this scheme through a Systematic Investment Plan (SIP). How is this news going to affect me? I am also a little worried about the NAV of the scheme going down.
- Ronak

Yes, it is true that the scheme has stopped accepting fresh investments. This means you will not be able to invest in the scheme anymore.

A top official of the fund has offered two reasons for not accepting fresh investments. One, the offer document of the scheme has stated that it will have a capacity constrain of ₹750 crore. It is nearing the target amount, that is why it has stopped accepting new investments. Two, the fund house also feels that with a large corpus it would be a struggle to find good investment avenues within the narrow universe of small and midcap stocks.

This is unlikely to have an adverse impact on the performance of the scheme.

This article was originally published on November 03, 2015.