Mutual Funds Schemes Reclassified as per New Rules to Help Investors Choose & Compare Funds
The Securities and Exchange Board of India (SEBI) has introduced a new system of fund classification to categorize mutual schemes to make decision making easier for consumers. The asset managers will
The Securities and Exchange Board of India (SEBI) has introduced a new system of fund classification to categorize mutual fund schemes to make decision making easier for consumers. The asset managers will now have to reclassify their product offerings according to the new directives.
The new classification will simplify and bring uniformity among the different types of funds. There are an estimated 837 open-ended schemes for the investors to choose from India. The new reclassification is aimed to avoid duplication and confusion. A fund house can offer 10 types of equity funds, 16 categories of bond schemes and 6 hybrid funds.
EQUITY
Multi-cap fund
Dividend-yield fund
Large-cap fund
Value fund/ Contra fund*
Large & mid-cap fund
Focused fund
Mid-cap fund
Sectoral/thematic fund
Small-cap fund
ELSS
DEBT
Overnight fund
Long duration fund
Liquid fund
Dynamic bond fund
Ultra short-duration fund
Corporate bond fund
Low duration fund
Credit risk fund
Money market fund
Banking and PSU fund
Short duration fund
Gilt fund
Medium duration fund
Gilt fund with 10-year constant duration
Medium to long duration fund
Floater fund
HYBRID
Conservative Hybrid fund
Multi-asset allocation
Balanced/ Aggressive Hybrid fund*
Arbitrage fund
Dynamic asset allocation or balanced advantage
Equity savings
SOLUTION ORIENTED
Retirement fund
Children's fund
OTHERS
Index funds/ ETFs
Fund of funds (Overseas/ domestic)
Fund houses have begun recategorizing their schemes. Some schemes will now be merged or renamed as per the new norms. Investors will also have to review and reallocate their funds as per their needs.
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