look news india
Mumbai: Share prices of many of the small, midcap stocks in the Indian stock markets have become overvalued and in this regard analysts and experts are warning investors to be cautious in new investments. Now capital markets regulator Securities and Exchange Board of India (SEBI) has also urged asset managers of small and mid cap funds to provide more information to their investors about the risks associated with these funds to protect the interests of investors.
According to a report, extraordinary inflows of investments have been witnessed in small, medium-sized funds, making the regulatory body alert on how to control the situation in case of any major selloff in the market. Sources also said that SEBI has also reviewed the stress tests conducted by such funds.
Sebi has asked asset managers of funds to provide more information to investors about the risks associated with small and mid-cap funds, people with knowledge of the matter and a fund manager said.
Funds must disclose information about how the funds will meet large redemptions in the event of any potential market crash or selloff and how these extraordinary outflows—redemptions—might affect the value of their portfolio and how they will be met. How much cash and liquid assets do they have? Large outflow-redemption. It is stated that.
Meanwhile, experts say that investment committees are always aware of liquidity challenges, but investors are not aware. Once this information is available to them, they can compare each fund.
The Association of Mutual Funds in India (AMFI), working with SEBI, has suggested a common framework for risk disclosure and the disclosures will be made on a regular basis. Let us tell you that due to huge inflow of investment, in the last one year, Nifty Small Cap 250 index has increased by more than 71 percent and Nifty Mid Cap 1000 index has increased by 64 percent. Whereas Nifty 50 index has increased by 28 percent.