Hybrid Funds Classified Under The New Category Defined By SEBI

The Securities and Exchange Board of India last year asked asset managers to recategorise their mutual fund schemes to bring uniformity and simplify choice for investors.

The schemes will be classified under five categories:

• Equity Schemes
• Debt Schemes
• Hybrid Schemes
• Solution-Oriented Schemes
• Other Schemes

The circular defined 10 categories for equity funds, 16 for debt funds, 6 for hybrid funds and 2 each for solution-oriented and other schemes.

Here’s a list of all hybrid, solution-oriented and other schemes classified under their new categories

Hybrid Funds

Conservative Hybrid Funds

• Investment in equity and equity-related instruments—between 10 percent and 25 percent of total assets.
• Investment in debt instruments between 75 percent and 90 percent of total assets.
• Invests predominantly in debt instruments.

Balanced Hybrid Funds

• Investment in equity and equity-related instruments between 40 percent and 60 percent of total assets.
• Investment in debt instruments—between 40 percent and 60 percent of total assets.
• No arbitrage would be permitted in this scheme.

Aggressive Hybrid Funds

• Investment in equity and equity-related instruments—between 65 percent and 80 percent of total assets.
• Investment in debt instruments—between 20 percent and 35 percent of total assets.

Dynamic Asset Allocation Funds or Balance Advantage

• Investment in equity or debt that is managed dynamically.

Multi-Asset Allocation Funds

• Invests in at least three asset classes with a minimum allocation of at least 10 percent in each.

Arbitrage Funds

• Minimum investment of 65 poercent of total assets in equity and equity-related instruments.

Equity Savings Funds

• Minimum investment in equity of 65 percent of total assets and minimum investment in debt of 10 percent of total assets.

Solution-Oriented Schemes

Retirement Funds

• Scheme having a lock-in for at least 5 years, or till retirement age, whichever is earlier.

Children’s Funds

• Scheme having a lock-in for at least 5 years, or till the child attains age of majority, whichever is earlier.

Other Schemes

Index Funds Or ETFs

• Minimum investment of 95 percent of total assets in securities of an index.

Fund Of Funds

• Minimum investment of 95 percent of total assets in the underlying fund.