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.
1 Conservative Hybrid Funds 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 2A Balanced Hybrid Funds@ 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 2B Aggressive Hybrid Funds 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 3 Dynamic Asset Allocation Funds or Balanced Advantage Investment in equity/ debt that is managed dynamically. All famous balanced advantage or dynamic funds will fall into this category. A hybrid mutual fund which will change its equity exposure based on market conditions 4 Multi-Asset Allocation Funds 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. A scheme investing in 3 different asset classes. 5 Arbitrage Funds Scheme following arbitrage strategy. Minimum investment in equity & equity related instruments – 65% of total assets A scheme investing in arbitrage opportunities 6 Equity Savings 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
Solution Oriented Schemes
1 Retirement Fund Scheme having a lock-in for at least 5 years or till retirement age whichever is earlier A retirement solution-oriented scheme having a lock-in of 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 the age of majority whichever is earlier A fund for investment for children having a lock-in for at least 5 years or till the child attains the age of majority (whichever is earlier) Other Schemes
1 Index Funds/ ETFs Minimum investment in securities of a particular index (which is being replicated/ tracked) – 95% of total assets A mutual fund replicating/ tracking any index 2 FoF’s (Overseas/Domestic) Minimum investment in the underlying fund – 95% of total assets A fund of fund is a mutual fund that invests in other mutual funds