by Dileep Ramachandran, Mutual Funds
05 Jun , 2018

New Equity Mutual Fund Classification by SEBI

            New Equity 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


Definition of Large Cap, Mid Cap and Small Cap

1.    Large Cap Funds - 1-100th Company in terms of full Market Capitalization

2.    Mid Cap Funds - 101st-250th Company in terms of full Market Capitalization

3.    Small Cap Funds - 250th onwards in terms of full Market Capitalization

Equity Scheme Sub Categories

1.  Multi Cap Fund-Minimum investment in equity and equity related instruments-65%of total assets.

2.    Large Cap Fund-Minimum investment in equity and equity related instruments of large cap companies-80% of total assets

3.  Large & Mid Cap Fund-Minimum investment in equity and equity related instruments of large cap companies-35% of total assets. Minimum investment in equity and equity related instruments of mid cap stocks-35% of total assets.

4.   Mid Cap Fund-Minimum investment in equity and equity related instruments of mid cap companies-65% of total assets.

5.    Small Cap Fund-Minimum investment in equity and equity related instruments of small cap companies-65% of total assets.

6.  Dividend Yield Fund-Scheme should predominantly invest in dividend yielding stocks. Minimum investment in equity-65% of total assets.

7. Value Fund-Scheme should follow a value investment strategy. Minimum investment in equity and equity related instruments-65% of total assets.

Contra Fund-Scheme should follow a contrarian investment strategy. Minimum investment in equity and equity related instruments-65% of total assets.

8.  Focused Fund-A Scheme focused on the number of stocks (maximum 30). Minimum investment in equity and equity related instruments-65% of total assets.

9. Sectoral/Thematic Fund-Minimum investment in equity and equity related instruments of a sector/particular theme -80% of total assets.

10. ELSS-Minimum investment in equity and equity related instruments-80% of total assets.


 About The Author

Dileep Ramachandran, Research Analyst with more than 4 years of total experience in the area of Equity and Mutual Fund Research.

 

Post Your Comments

blog detail page Ad Vertical - 1

SIMILAR TOPICS/ RELATED TOPICS

Popular

Start your financial planning today

Get started for free