I have invested in SBI Small and Midcap Fund in October. I had invested through a Systematic Investment Plan (SIP) of ₹500 every month. They have stopped accepting further purchases and now the NAV is also going down. Is there something to worry about?
- Ronak
The move will not have any negative impact on your investments. The offer document of the scheme stated that it will have a capacity constraint of ₹750 crore. It was nearing the target amount, that is why it has stopped accepting new investments. Also, the fund house felt that with a large corpus it would be a struggle to find good investment avenues within the narrow universe of small and midcap stocks. It is not unusual for mid cap funds to stop accepting fresh investments temporarily. For example, IDFC Premier Equity Fund, Franklin Prima Fund, HSBC Midcap Fund, Reliance Growth etc have stopped taking fresh investments for a limited period in the past.
This article was originally published on December 02, 2015.
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