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.
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