Single stock investment
There is a rule that says that mutual fund schemes cannot buy more than 10 per cent of a single stock in their portfolio. This means that the purchase of the stock, once the 10 per cent limit has been crossed, would not be possible for the fund manager. This is not applicable for sectoral schemes where the holding can cross this figure.
If there is a rise in the value of the stock and this crosses the mark, then it is not considered a violation as there are no further purchases pushing up the value.
Also see: 10 investment mantras