SEBI Circular on Categorisation and Rationalisation of Mutual fund schemes, 2017
SEBI has categorized all Mutual funds in 5 Broad categories:
- Equity Schemes (11 sub-categories)
- Debt Schemes (16 sub-categories)
- Hybrid Schemes (6 sub-categories)
- Solution Oriented Schemes (2 sub-categories)
- Other Schemes (2 sub-categories)
Equity Schemes (11 schemes)
| Multi Cap Funds | Min 25% in Large Cap companies (1 – 100th company)Min 25% in Mid Cap companies (101st – 250th company)Min 25% in Small Cap companies (251st company onwards) |
| Large Cap Funds | Min 80% in Large cap companies |
| Large & Mid Cap | Min 35% in Large + Min 35% in Mid |
| Mid Cap Funds | Min 65% in Mid Cap |
| Small Cap Funds | Min 65% in Small Cap |
| Dividend Yield Funds | Min 65% in equity + Majority in dividend yielding stocks |
| Value Stocks or Contra Fund | Min 65% in equity stocksValue fund = Value Investment StrategyContra fund = Contrarian Investment Strategy |
| Focussed Fund | Maximum 30 Stocks + Min 65% in equity |
| Sectoral/Thematic | Min 80% in equity of a particular sector |
| ELSS | Statutory lock-in of 3 years and tax benefitsMin 80% investment in equity |
| Flexi-Cap | Min 65% investment in equityVaried investment across large, mid and small cap stocks |
Debt Schemes (16 schemes)
All of the below debt schemes are Open-ended
| Overnight Fund | Overnight securities having maturity of 1 day |
| Liquid Fund | Debt and money market securities having maturity of 91 days (T-bills, bank bonds, etc.) |
| Ultra short duration Fund | Debt and money market securities with Macaulay duration of portfolio between 3 to 6 months Macaulay formula = Wtd avg time to receive a bond’s cash flows C = Coupon rate M = Maturity value  |
| Low duration Fund | Debt and money market securities with Macaulay duration of portfolio between 6 months to 1 year |
| Money Market Fund | Money market instruments with maturity up to 1 year |
| Short Duration Fund | Debt and money market securities with Macaulay duration of portfolio between 1 to 3 years |
| Medium Duration Fund | Debt and money market securities with Macaulay duration of portfolio between 3 to 4 years |
| Medium to Long Duration fund | Debt and money market securities with Macaulay duration of portfolio between 4 to 7 years |
| Long Duration fund | Debt and money market securities with Macaulay duration of portfolio more than 7 years |
| Dynamic bond | Investing across durations |
| Corporate Bond Fund | Min 80% investment in AA+ and above rated corporate bonds |
| Credit Risk Fund | Min 65% investment in AA and below rated corporate bonds |
| Banking & PSU Fund | Min 80% investment in Bank and PSU debt instruments |
| Gilt Fund | Min 80% investment in G Secs across maturity |
| Gilt Fund with 10 yr | Min 80% investment in G Secs so that Macaulay duration of portfolio is 10 years |
| Floater Fund | Min 65% investment in floating rate instruments |
Hybrid Schemes (6 schemes)
| Conservative Hybrid Fund | 75-90% in debt instruments10-25% in equity and equity instruments |
| Balanced Hybrid Fund | 40-60% in equity and equity related instruments40-60% in debt instrumentsNo arbitrage permitted |
| Aggressive Hybrid Fund | 65-80% in equity and equity related instruments20-35% in debt instrumentsNote: Mutual funds in India can offer either Aggressive Hybrid Fund OR Balanced Fund |
| Dynamic Asset Allocation/ Balanced Advantage | Investment in equity/debt managed dynamically |
| Multi Asset Allocation | Invests in at least 3 asset classesMinimum 10% allocation in each asset classForeign securities not treated as separate asset class |
| Arbitrage Fund | Minimum 65% in equityInvests in arbitrage opportunities |
| Equity Savings | Minimum 65% in equityMinimum 10% in debtInvests in equity, arbitrage and debt |
Solution-Oriented Schemes (2 schemes)
| Retirement Fund | Lock-in of 5 years or till retirement (whichever is earlier)For long-term retirement corpus planning |
| Children’s Fund | Lock-in of 5 years or till child’s majority (earlier of two)For building corpus for child’s future needs |
Other Schemes (9 schemes)
| Index Funds/ETFs | Minimum 95% in securities of a specific index being tracked |
| Fund of Funds (Overseas/ Domestic) | Minimum 95% in underlying fund |
| Fixed Maturity Plans | Close-ended debt fundsPortfolio duration aligned with scheme maturity |
| Target Maturity Date Funds (TMF) | Debt funds with specific maturity dates (2-10 years)Invest in bonds with matching maturities |
| Capital Protection Oriented Funds | Closed-end hybrid fundsPart investment in debt instruments for capital protectionRemaining in equity derivatives for higher returns |
| Infrastructure Debt Funds | Minimum 90% in debt securities of infrastructure companies/projectsCan be set up as Trust (regulated by SEBI) or Company (regulated by RBI) |
| Real Estate Mutual Fund | Minimum 75% in real estate assets, mortgage-backed securities, equity sharesAt least 35% in physical assetsClosed-end and listed on stock exchange |
| ESG Funds | Sub-category under thematic equity schemesVarious strategies: Exclusion, Integration, Best-in-class, Impact investing, etc. |
| Specialized Investment Fund (SIF) | Minimum investment amount: Rs. 10 lakhs |
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always consult with a qualified financial advisor before making investment decisions.