Hybrid Schemes

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