Securities and Exchange Board of India (SEBI), the mutual fund regulator in India, has introduced guidelines for classifying mutual funds into five broad categories. These categories are based on the risk and return of the investment and are designed to make mutual fund investments simpler, transparent and comparable.
SEBI’s five broad mutual fund categories are:
- Equity-oriented schemes (Equity allocation almost 100%)
- Debt-oriented schemes (No equity at all)
- Hybrid schemes (combination of debt, equity, other assets)
- Solution-oriented schemes (Children, Retirment etc.)
- Others
Each of these five categories has sub-categories
| Equity-Oriented | Debt-Oriented | Hybrid | Solution-Oriented | Others | ||
|---|---|---|---|---|---|---|
| Multi cap Fund | Overnight Fund | Conservative Hybrid Fund | Retirement Fund | Index Funds / ETF | ||
| Flexi cap Fund | Liquid Fund | Balanced Hybrid Fund | Children’s Fund | FOFs: Domestic / Overseas | ||
| Large cap Fund | Ultra short duration Fund | Aggressive Hybrid Fund | ||||
| Mid cap Fund | Low duration Fund | Dynamic asset allocation or balanced advantage Fund | ||||
| Small cap Fund | Money market Fund | Multi-asset allocation Fund | ||||
| Large & mid cap Fund | Short duration Fund | Arbitrage Fund | ||||
| Dividend yield Fund | Medium duration Fund | Equity savings Fund | ||||
| Value / contra Fund | Medium to Long Duration Fund | |||||
| Focused Fund | Long Duration Fund | |||||
| Sectoral / Thematic Fund | Dynamic Bond Fund | |||||
| ELSS Fund | Corporate bond Fund | |||||
| Credit risk Fund | ||||||
| Banking / PSU Fund | ||||||
| Gilt Fund | ||||||
| Gilt 10-year constant maturity Fund | ||||||
| Floater Fund | ||||||
Equity-oriented schemes are further categorized based on the market capitalization of the underlying securities into large-cap, mid-cap and small-cap shares.
- Debt-oriented schemes are categorized based on the maturity of the type of securities they invest in.
- Hybrid schemes are a combination of equity and debt / other investments.
- Solution-oriented schemes are designed for specific goal, such as retirement planning.
- The "Others" category includes passively managed index funds, ETFs and FoFs.
Note: Investors should refer to the SEBI Circular for detailed information on each category, including investment guidelines and risk-return characteristics.
Large-cap shares: 1st to 100th company as per market capitalization
Mid-cap shares: 101st to 250th company as per market capitalization
Small-cap shares: 251st onwards as per market capitalization
(Source HDFC Mutual Fund website)
You can read details in SEBI Circular attached in this article.
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