SEBI has decided on a total of 7 categories under Hybrid Schemes but a mutual fund company can only have 6 categories and they have to choose between Balanced Hybrid Fund or Aggressive Hybrid Fund. Also, Finally, SEBI has made Arbitrage Fund under the Hybrid Fund category.
Investment in equity & equity related instruments – between 10% and 25% of total assets; Investment in Debt instruments – between 75% and 90% of total assets
A hybrid mutual fund investing predominantly in debt instruments
Equity & 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
50-50 balanced scheme investing in equity and debt instruments
Equity & Equity related instruments – between 65% and 80% of total assets; Debt instruments – between 20% – 35% of total assets. Most of the balanced funds will fall into this category.
A hybrid scheme investing predominantly in equity and equity-related instruments
Invests in at least three asset classes with a minimum allocation of at least 10% each in all three asset classes. Foreign investment will be considered as a separate asset class.
Minimum investment in equity & equity-related instruments – 65% of total assets and minimum investment in debt – 10% of total assets. Minimum hedged & unhedged to be stated in the SID. Asset Allocation under defensive considerations may also be stated in the Offer Document
A scheme investing in equity, arbitrage, and debt
@Mutual Funds will be permitted to offer either an Aggressive Hybrid fund or Balanced fund