New Debt Mutual Fund Classification by SEBI
New Debt
Mutual Fund Classification by SEBI
On October 2017, Securities and Exchange
Board of India (SEBI) released a new circular to rationalize and categorize the
Mutual Funds in India. The main aim of the circular is to standardize the
scheme of all the categories. There are 36 sub categories under the main
categories (Equity, Debt, Hybrid, Solution Oriented and other).
According to the circular “Mutual Fund
Categorization and Rationalization”, the categories as follows.
Equity Schemes-investment in equity and equity
related instruments
Debt Schemes-investment in debt instruments
Hybrid Schemes-investment in a mix of equity, debt
and other assets
Solution Oriented Schemes-retirement or
children savings scheme
Other Schemes-Index Funds, Fund of
Funds and ETFs
Debt Scheme Sub Categories
1. Overnight
Fund-Investment in overnight securities having maturity of 1 day.
2. Liquid
Fund-Investment in Debt and money market securities with maturity of upto 91
days only.
3. Ultra
Short Duration Fund-Investment in Debt and money market instruments such that
the macaulay duration of the portfolio is between 3 months-6 months
4. Low
Duration Fund-Investment in Debt and Money Market Instruments such that the
Macaulay duration of the portfolio is between 6 months-12 months
5. Money
Market Fund-Investment in Money Market instruments having maturity upto 1 year.
6. Short
Duration Fund-Investment in Debt & Money Market instruments such that the
Macaulay duration of the portfolio is between 1 Year-3 Years.
7. Medium
Duration Fund-Investment in Debt & Money Market instruments such that the
Macaulay duration of portfolio is between 3 Years-4 Years.
8. Medium
to Long Duration Fund-Investment in Debt and Money Market instruments such that
the Macaulay duration of the portfolio is between 4-7 Years.
9. Long
Duration Fund-Investment in Debt & Money Market instruments such that the
Macaulay duration of the portfolio is greater than 7 Years.
10. Dynamic
Bond Fund-Investment across duration
11. Corporate
Bond Fund-Minimum investments in corporate bonds-80% of total assets (only in
highest rated instruments).
12. Credit
Risk Fund-Minimum Investment in Corporate bonds-65% of total assets (investment
in below highest rated instruments)
13. Banking
& PSU Fund-Minimum investment in Debt instruments of Banks, Public Sector
Undertakings, Public Financial Institutions-80% of total assets.
14. Gilt
Fund-Minimum investment in Gsecs-80% of total assets (across maturity).
15. Gilt
Fund with 10 Year Constant Duration-Minimum investments in Gsecs-80% of total
assets such that the Macaulay duration of the portfolio is equal to 10 Years.
16. Floater
Fund-Minimum investment in floating rate instruments-65% of total assets.
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