by Dileep Ramachandran, Mutual Funds
07 Jun , 2018

New Hybrid Mutual Fund Classification by SEBI

       New Hybrid 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

Hybrid Scheme Sub Categories

1.  Conservative Hybrid Funds-Investment in equity and equity related instruments- between 10% and 25% of total assets

Investment in Debt instruments- between 75% and 90% of total assets.

2.  Balanced Hybrid Fund- Equity & Equity related instruments-between 40% and 60% of total assets.

Debt instruments- between 40% and 60% of total assets.

Aggressive Hybrid Fund-Equity & Equity related instruments-between 65% and 80% of total assets. Debt instruments-between 20% and 35% of total assets.

3.  Dynamic Asset Allocation or Balanced Advantage-Investment in equity/debt that is managed dynamically.

4.  Multi Asset Allocation-Invests in at least three asset classes with a minimum allocation of at least 10% each in all three asset classes.

5.  Arbitrage Fund-Scheme following arbitrage strategy. Minimum investment in equity and equity related instruments-65% of total assets.

6.  Equity Savings-Minimum investment in equity and equity related instruments-65% of total assets and minimum investment in debt-10% 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.


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