The same best idea.
Two very different cheques.
One high-conviction midcap, six percent of the book. Watch what happens to it as the fund grows.
|
Small fund Rs 500 cr |
Big fund Rs 40000 cr |
| Six pct in its best midcap | Rs 30 cr | Rs 2400 cr |
| Days to build it | 2 | 192 |
| Most it may own of that stock | Rs 800 cr | Rs 800 cr |
| Weight the idea ends up at | 6 pct | under 1 pct |
The Rs 2400 cr order cannot be filled in a midcap and is not even allowed. SEBI caps any fund at ten percent of one company, so on a Rs 8000 cr stock the ceiling is Rs 800 cr. The idea that made the numbers gets shaved to a rounding error, or dropped. So the fund drifts into the top twenty large caps everyone already owns.