MFs’ narrow midcap universe under cloud with only 150 firms to invest in

Mutual fund (MF) allocations to the midcap segment may be under a question mark in light of the fact that it has only 150 companies to invest in and a good part of the publicly available shares are already in the hands of domestic funds. MFs’ midcap holdings account for 18 per cent of the free float of the companies concerned. Stock market regulator, the Securities and Exchange Board of India (Sebi), allows even midcap schemes to invest over a third of their assets in the securities of non-midcap companies, according to the regulator’s October 2017 circular.

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