Type of Mutual Fund Schemes

Mutual funds have different investment strategies, so it is important that they are all clearly labeled and have similar characteristics (such as asset allocation and investment strategy). This will help people to make an informed decision as to which mutual fund to invest in. The Mutual Fund industry has decided to divide its schemes into categories, with each category having similar characteristics.

Categories  of  Schemes, Scheme  Characteristics and Type  of  Scheme  (Uniform Description of Schemes):

Mutual fund schemes are generally categorized based on their investment objective and the types of securities they invest in. Some common categories include:

Equity funds: These invest primarily in stocks and are further classified into subcategories such as large-cap, mid-cap, and small-cap funds.

Debt funds: These invest primarily in fixed-income securities such as bonds and debentures. They are further classified into subcategories such as government securities, corporate bonds, and money market funds.

Hybrid funds: These invest in both stocks and bonds and are further classified into subcategories such as balanced funds and equity-oriented hybrid funds.

Specialty funds: These invest in a specific sector or asset class such as real estate, gold, or international securities.

Index funds: These funds aim to replicate the performance of a specific stock market index such as the S&P 500.

It's worth noting that these categories are not mutually exclusive and some funds may have characteristics that overlap with multiple categories. It is important to read the fund's objectives and policies before investing. The details of the scheme categories under each of the aforesaid groups along with their characteristics and uniform description are given in the table

Definition of Large Cap, Mid Cap and Small Cap:

In  order  to  ensure uniformity  in  respect  of the  investment  universe  for equity schemes, it has been decided to define large cap, mid cap and small capas follows:

a. Large Cap: 1st-100th company in terms of full market capitalization

b. Mid Cap: 101st-250th company in terms of full market capitalization

c. Small Cap:251st company onwards in terms of full market capitalization

A.  Equity Schemes:    
Sr. Category         of Scheme Characteristics Type of scheme (uniform
No. Schemes description of scheme)
1 Multi Cap Fund Minimum investment in equity & Multi    Cap    Fund-    An open
equity related instruments- 65% of ended equity scheme investing
total assets across large cap, mid cap,
  small cap stocks
2 Large Cap Fund Minimum investment in equity & Large Cap Fund- An open
equity related instruments of large ended          equity          scheme
cap companies- 80% of total assets predominantly     investing     in
  large cap stocks
3 Large & Mid Cap Minimum investment in equity & Large & Mid Cap Fund- An
Fund equity related instruments of large open ended equity scheme
  cap companies- 35% of total assets investing in both large cap and
  Minimum investment in equity & mid cap stocks
  equity related instruments of mid  
  cap stocks- 35% of total assets  
4 Mid Cap Fund Minimum investment in equity & Mid Cap Fund- An open ended
equity related instruments of mid equity scheme predominantly
cap companies- 65% of total assets investing in mid cap stocks
5 Small cap Fund Minimum investment in equity & Small Cap Fund- An open
equity related instruments of small ended          equity          scheme
cap companies- 65% of total assets predominantly     investing     in
  small cap stocks
6 Dividend      Yield Scheme      should      predominantly An open ended equity scheme
Fund invest in dividend yielding stocks. predominantly     investing     in
    dividend yielding stocks
  Minimum investment in equity- 65%  
  of total assets  
7 Value Fund* Scheme should follow a value An open ended equity scheme
investment strategy. following a value investment
Minimum investment in equity & strategy
equity related instruments - 65% of  
total assets  
Contra Fund* Scheme should follow a contrarian An open ended equity scheme
investment strategy. following contrarian investment
Minimum investment in equity & strategy
equity related instruments - 65% of  
total assets  
8 Focused Fund A scheme focused on the number of An open ended equity scheme
stocks (maximum 30) investing     in     maximum     30
Minimum investment in equity & stocks    (mention    where    the
equity related instruments - 65% of scheme intends to focus, viz.,
total assets  
      multi cap, large cap, mid cap,
small cap)
9 Sectoral/ Minimum investment in equity & An open ended equity scheme
Thematic equity related instruments of a investing in __ sector (mention
  particular sector/ particular theme- the sector)/
  80% of total assets An open ended equity scheme
    following __ theme (mention
    the theme)
10 ELSS Minimum investment in equity & An open ended equity linked
equity related instruments - 80% of saving scheme with a statutory
total assets (in accordance with lock in of 3 years and tax
Equity Linked Saving Scheme, 2005 benefit
notified by Ministry of Finance)  
* Mutual Funds will be permitted to offer either Value fund or Contra fund.
B.  Debt Schemes    
Sr. Category         of Scheme Characteristics Type of scheme (uniform
No. Schemes description of scheme)
1 Overnight Fund** Investment in overnight securities An open ended debt scheme
having maturity of 1 day investing in overnight securities
2 $ Investment in Debt     and money An open ended liquid scheme
Liquid Fund ** market securities with maturity of
  upto 91 days only
3 Ultra             Short Investment in Debt & Money Market An open ended ultra-short term
Duration Fund instruments such that the Macaulay debt     scheme     investing     in
  duration of the portfolio is between instruments     with     Macaulay
  3 months - 6 months duration between 3 months and
    6 months (Read the offer period before investing)
     
4 Low        Duration Investment in Debt & Money Market An open ended low duration
Fund instruments such that the Macaulay debt     scheme     investing     in
  duration of the portfolio is between instruments     with     Macaulay
  6 months- 12 months duration between 6 months and
    12 months (Read the offer period before investing)
     
5 Money      Market Investment     in     Money     Market An open ended debt scheme
Fund instruments having maturity upto 1 investing    in    money    market
  year instruments
6 Short      Duration Investment in Debt & Money Market An open ended short term debt
Fund instruments such that the Macaulay scheme           investing           in
  duration of the portfolio is between instruments     with     Macaulay
  1 year – 3 years duration between 1 year and 3
    years 
    (Read the offer period before investing)
7 Medium Duration Investment in Debt & Money Market An open ended medium term
Fund instruments such that the Macaulay debt     scheme     investing     in
    instruments     with     Macaulay
    duration of the portfolio is between duration between 3 years and 4
3 years – 4 years years 
  (Read the offer period before investing)
8 Medium to Long Investment in Debt & Money Market An open ended medium term
Duration Fund instruments such that the Macaulay debt     scheme     investing     in
  duration of the portfolio is between instruments     with     Macaulay
  4 – 7 years duration between 4 years and 7
    years 
    (Read the offer period before investing)
9 Long      Duration Investment in Debt & Money Market An open ended debt scheme
Fund Instruments such that the Macaulay investing in instruments with
  duration of the portfolio is greater Macaulay duration greater than
  than 7 years 7 years
    (Read the offer period before investing)
10 Dynamic Bond Investment across duration An open ended dynamic debt
scheme       investing       across
duration
11 Corporate Bond Minimum investment in corporate An open ended debt scheme
Fund bonds- 80% of total assets (only in predominantly     investing     in
  highest rated instruments) highest rated corporate bonds
12 Credit             Risk Minimum investment in corporate An open ended debt scheme
Fund^ bonds-     65%     of     total     assets investing in below highest rated
  (investment in below highest rated corporate bonds
  instruments)  
13 Banking          and Minimum     investment     in     Debt An open ended debt scheme
PSU Fund instruments of banks, Public Sector predominantly investing in Debt
  Undertakings,      Public      Financial instruments of banks, Public
  Institutions- 80% of total assets Sector    Undertakings,    Public
    Financial Institutions
14 Gilt Fund Minimum investment in Gsecs- 80% An open ended debt scheme
of total assets (across maturity) investing        in        government
  securities across maturity
15 Gilt Fund with 10 Minimum investment in Gsecs- 80% An open ended debt scheme
year        constant of    total    assets    such    that    the investing        in        government
duration Macaulay duration of the portfolio is securities having a constant
  equal to 10 years maturity of 10 years
16 Floater Fund Minimum investment in floating rate An open ended debt scheme
instruments- 65% of total assets predominantly     investing     in
  floating rate instruments
       
C.   Hybrid Schemes    
Sr. Category of Scheme Characteristics Type of scheme (uniform
No. Schemes description of scheme)
1 Conservative Investment in equity & equity related An open ended hybrid scheme
Hybrid Fund instruments- between 10% and 25% investing predominantly in debt
  of total assets; instruments
  Investment in Debt instruments-  
  between 75% and 90% of total  
  assets  
2 Balanced Hybrid Equity & Equity related instruments- An    open    ended    balanced
Fund @ between 40%     and 60% of total scheme investing in equity and
  assets; debt instruments
  Debt instruments- between 40%  
  and 60% of total assets  
  No Arbitrage would be permitted in  
  this scheme  
Aggressive Equity & Equity related instruments- An open ended hybrid scheme
Hybrid Fund @ between 65% and 80% of total investing     predominantly     in
  assets; equity     and     equity     related
  Debt instruments- between 20% instruments
  35% of total assets  
3 Dynamic    Asset Investment in equity/ debt that is An open ended dynamic asset
Allocation or managed dynamically allocation fund
Balanced    
Advantage    
4 Multi            Asset Invests in at least three asset An     open     ended     scheme
Allocation ## classes with a minimum allocation investing in __, __, __ (mention
  of at least 10% each in all three the     three     different     asset
  asset classes classes)
5 Arbitrage Fund Scheme         following         arbitrage An     open     ended     scheme
strategy. Minimum investment in investing          in          arbitrage
equity & equity related instruments- opportunities
65% of total assets  
6 Equity Savings Minimum investment in equity & An     open     ended     scheme
equity related instruments- 65% of investing in equity, arbitrage
total       assets       and       minimum and debt
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		  

Mutual Funds will be permitted to offer either an Aggressive Hybrid fund or Balanced fund
## Foreign securities will not be treated as a separate asset class
       
D.  Solution Oriented Schemes:  
Sr. Category         of Scheme Characteristics Type of scheme (uniform
No Schemes description of scheme)
1 Retirement Fund Scheme having a lock-in for at least An    open    ended    retirement
5    years    or    till    retirement    age solution      oriented      scheme
whichever is earlier 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 An    open    ended    fund    for
5 years or till the child attains age of investment for children having
majority whichever is earlier a lock-in for at least 5 years or
  till the child attains age of
  majority (whichever is earlier)
       
A.  Other Schemes:    
Sr. Category         of Scheme Characteristics Type of scheme (uniform
No Schemes description of scheme)
1 Index        Funds/ Minimum investment in securities of An     open     ended     scheme
ETFs a particular index (which is being replicating/ tracking _ index
  replicated/ tracked)- 95% of total  
  assets  
2 FoFs (Overseas/ Minimum      investment      in      the An open ended fund of fund
Domestic) underlying fund- 95% of total assets scheme investing in ___ fund
    (mention the underlying fund)

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