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.

1Conservative Hybrid FundsInvestment in equity & equity related instruments – between 10% and 25% of total assets; Investment in Debt instruments – between 75% and 90% of total assetsA hybrid mutual fund investing predominantly in debt instruments
2ABalanced 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 scheme50-50 balanced scheme investing in equity and debt instruments
2BAggressive Hybrid FundsEquity & 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
3Dynamic Asset Allocation Funds or Balanced AdvantageInvestment 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
4Multi-Asset Allocation FundsInvests 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.
5Arbitrage FundsScheme following arbitrage strategy. Minimum investment in equity & equity related instruments – 65% of total assetsA scheme investing in arbitrage opportunities
6Equity SavingsMinimum 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 DocumentA 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

1Retirement FundScheme having a lock-in for at least 5 years or till retirement age whichever is earlierA retirement solution-oriented scheme having a lock-in of 5 years or till retirement age (whichever is earlier)
2Children’s FundScheme having a lock-in for at least 5 years or till the child attains the age of majority whichever is earlierA 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

1Index Funds/ ETFsMinimum investment in securities of a particular index (which is being replicated/ tracked) – 95% of total assetsA mutual fund replicating/ tracking any index
2FoF’s (Overseas/Domestic)Minimum investment in the underlying fund – 95% of total assetsA fund of fund is a mutual fund that invests in other mutual funds

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