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Categorisation and Rationalisation of Mutual Fund Scheme

Amitav 
on 16 October 2017

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All the scheme launched by Mutual Funds should be similar; with having  standard characteristics in each category. It will  help the investors of Mutual Fund to evaluate the different options available before taking a decision.

The schemes would be broadly classified in following groups:

  • Equity Scheme
  • Debt Schemes
  • Hybrid Scheme
  • Solution Oriented Schemes
  • Other Schemes

A. Equity Scheme


Sr. No

Category of Scheme

Scheme Characteristics

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 companies -80% of total assets

3

Large cap and Mid cap Fund

Minimum investment in Equity and equity related instruments of large 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 value 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

Minimum investment in equity and equity related instruments of a particular sector / particular theme - 80% of total assets

10

ELSS

Minimum investment in equity and equity related instruments -80% of total assets ( in accordance with Equity Linked Saving  Scheme, 2005 notified by Ministry of Finance )


B. Debt Scheme:


Sr. No

Category of Scheme

Scheme Characteristics

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 up to 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 to 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 to 12 months

5

Money Market Fund

Investment in money market instruments having maturity  up to 1 year

6

Short Duration Fund

Investment in Debt and Money Market instruments such that the Macaulay duration of the portfolio is between  1 years  to 3 years .

7

Medium Duration Fund

Investment in Debt and Money Market instruments such that the Macaulay duration of the portfolio is between  3 years  to 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 years  to 7 years .

9

Long Duration Fund

Investment in Debt and Money Market instruments such that the Macaulay duration of the portfolio is greater than 7 years .

10

Dynamic Bond

Investment across duration

11

Corporate Bond Fund

Minimum investment 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 and 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 G secs- 80% of total assets ( across maturity )

15

Gilt fund with 10 year constant duration

Minimum investment in G secs- 80% of total assets  such  that Macaulay duration of the portfolio is  equal to 10 years

16

Floater Fund

Minimum investment in floating rate  instruments - 65% of total assets


C. Hybrid Scheme


Sr. No

Category of Scheme

Scheme Characteristics

1

Conservative Hybrid Scheme

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

Balance Hybrid Fund

Equity and equity related instruments between - 40% and 60% of total assets

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

No arbitrage would be permitted in this scheme

Aggressive Hybrid Fund

Equity and 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

Minimum hedged and un hedged to be stated  in the SID.

Asset allocation under defensive considerations may also be stated in the offer document.


D. Solutions Oriented Scheme


Sr. No

Category of Scheme

Scheme Characteristics

1

Retirement Fund

Scheme having a lock in  for at least 5 years or till retirement age whichever is earlier.

2

Children's Fund

Scheme having a lock in  for at least 5 years or till the child attains age of majority whichever is earlier.


E. Other Schemes


Sr. No

Category of Scheme

Scheme Characteristics

1

Index Funds/ ETFs

Minimum investment in securities of a particular index (which is being replicated / tracked) -95% of total assets.

2

FoFs (Overseas / Domestics)

Minimum Investment in the underlying fund -95% of total assets


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