InvestorQ : I have invested in Reliance Equity Opportunities fund as Rs.2000 sip p.m. What is the future of the fund?
tanvi Patel made post

I have invested in Reliance Equity Opportunities fund as Rs.2000 sip p.m. What is the future of the fund?

Answer
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IIFL Expert answered.
2 weeks ago


Reliance Equity Opportunities Fund (Nippon India Multi-Cap Fund) is a multi-cap category equity mutual fund scheme which is allowed to invest across sectors and market capitalization without any restrictions with respect to market capitalization. However, with the recent changes mandated by the market regulator (SEBI), the investment structure of the multi-cap category will change. SEBI has now mandated multi-cap funds to invest at least 25% each in mid-cap and small-cap stocks. Multi-Cap funds are generally recommended to investors with moderately high-risk appetite and an investment horizon of at least 5 years. But the imposition of the aforementioned conditions will significantly increase the risk associated with this category.

Therefore, multi-cap funds are now relevant to those investors who have a high-risk appetite and an investment horizon of at least 7-8 years. Schemes with large AUM will find it difficult to comply with the new norms and may look to re-classify or merge with large or large & mid-cap categories. However, smaller ones are likely to restructure themselves to align it to the regulator's condition over the stipulated time frame provided by the SEBI (Jan 31, 2021).

Thus investors of multi-cap schemes are advised to see how the characteristics of their fund are changing and re-adjust ongoing investment to their risk profile. It is also recommended that investors go through a risk profiling exercise, define their realistic financial goals, and link investment instruments to a goal before making any investment decision.