Mutual Fund Products and Scheme Categories
The SEBI category grid (October 2017)
SEBI permits one scheme per category per AMC (plus one index fund and one ETF per category), which makes classification questions predictable.
Equity schemes - minimum 80% in equity unless stated: multi cap (25/25/25 across large/mid/small), large cap (top 100), mid cap (101–250), small cap (251 onwards), large & mid cap (35/35), flexi cap (65%+), focused (max 30 stocks), ELSS (80%+ equity, 3-year lock-in, eligible for Section 80C), sectoral/thematic (80%+ in the theme), value/contra.
Debt schemes by Macaulay duration: overnight (1 day), liquid (91 days), ultra short (3–6 months), low duration (6–12 months), money market (1 year), short duration (1–3 years), medium duration (3–4 years), medium-to-long (4–7 years), long duration (7+ years); plus dynamic bond, corporate bond (80%+ in AA+ and above), credit risk (65%+ in AA and below), banking & PSU (80%+), gilt (80%+ G-secs) and gilt with 10-year constant duration.
Hybrid schemes: conservative (75–95% debt), balanced (40–60% equity), aggressive (65–80% equity), dynamic asset allocation, multi-asset (10%+ in three asset classes), arbitrage (65%+ arbitrage), equity savings.
Solution-oriented - retirement and children's funds, each with a 5-year lock-in or until the child attains majority.
Others - index funds, ETFs, fund of funds, fixed maturity plans.
Traps
- ELSS lock-in is 3 years (not 5, which applies to solution-oriented schemes).
- Balanced hybrid = 40–60% equity, not 65%.
- A gilt fund is not a credit-risk fund; it holds sovereign paper.
- Direct and regular plans are not separate "categories" - they are the same scheme with different expense structures.
Rule of thumb
Match debt-scheme duration to your investment horizon; a duration-7 fund is not a substitute for a 6-month parking place.