June 12, 2020

Types of Mutual Funds in India – A complete list

How many of you know the types of Mutual Funds in India? Many of us simply invest based on the returns or fancy star ratings. However, only a few know the complete list of mutual funds.

In this article, let us understand the complete list of mutual funds types as per the SEBI.

I am not going into the details of what is a mutual fund. In this post, I am just trying to share the types of mutual funds in India. This list is based on SEBI’s Categorization.

Types of Mutual Funds in India – A complete list

In this, at first you have to understand the types of mutual funds in India based on the structure and characteristic.

Types of Mutual Funds in India – Based on Structure

Open-Ended Funds:-These schemes are available for buying or selling on a continuous basis. There is no fixed maturity period. Investors have the option to buy and sell units at NAV which is declared on a daily basis. As you can buy and sell the units as per your wish, these schemes are liquid in nature.

Close-Ended Funds:-Units of a close-ended mutual fund are available for purchase during the NFO (New Fund Offer) period. In a close-ended mutual fund, a fixed number of units are issued. Redemption is allowed only after the maturity of the fund which varies from fund to fund.

Interval Funds:-These acts like Open-Ended Funds and also Close Ended Funds. These funds can be purchased or sold only at specific intervals as per the discretion of the mutual fund company. The fund remains closed for the rest of the time. 

Types of Mutual Funds in India – Based on Characteristic

As per the SEBI, the types of Mutual Funds in India are broadly categorized as below.

a. Equity Schemes
b. Debt Schemes
c. Hybrid Schemes
d. Solution-Oriented Schemes
e. Other Schemes

Within these schemes again the various categories are specified. Let us see one by one. Let me share the same through this below image.

Now, let us understand the definition of these categories in detail like how SEBI defined them.

a. Equity Schemes

1Multi Cap Funds Minimum investment in equity & equity related instruments–65% of total assetsMulti Cap Fund – An equity mutual fund investing across Large Cap, Mid Cap, Small Cap stocks
2Large Cap FundsMinimum investment in equity & equity related instruments of large cap companies – 80% of total assetsLarge Cap Fund – An equitymutual fund predominantly investing in Large Cap stocks
3Large & Mid Cap FundsMinimum investment in equity & equity related instruments of large cap companies – 35% of total assetsMinimum investment in equity & equity related instruments of mid cap stocks – 35% of total assetsLarge & Mid Cap Fund – An open ended equity mutualfund investing in both large cap and mid cap stocks
4Mid Cap FundsMinimum investment in equity & equity related instruments of mid cap companies – 65% of total assetsMid Cap Fund – An equitymutual fund predominantly investing in Mid Cap stocks
5Small Cap FundsMinimum investment in equity & equity related instruments of small cap companies – 65% of total assetsSmall Cap Fund – An equitymutual fund predominantly investing in Small Cap stocks
6Dividend Yield FundsScheme should predominantly invest in dividend yielding stocks. Minimum investment in equity – 65% of total assetsAn equitymutual fund predominantly investing in dividend yielding stocks
7aValue Funds*Scheme should follow a value investment strategy. Minimum investment in equity & equity related instruments – 65% of total assetsAn equitymutual fund following a value investment strategy
7bContra Funds*Scheme should follow a contrarian investment strategy. Minimum investment in equity & equity related instruments – 65% of total assetsAn equitymutual fund following contrarian investment strategy
8Focused FundsA scheme focused on the number of stocks (maximum 30) Minimum investment in equity & equity related instruments – 65% of total assetsAn equity scheme investing in maximum 30 stocks (mention where the scheme intends to focus, viz., multi cap, large cap, mid cap, small cap)
9Sectoral Funds or ThematicMinimum investment in equity & equity related instruments of a particular sector/particular theme – 80% of total assetsAn open ended equity scheme following the theme as mentioned
10ELSS FundsMinimum investment in equity & equity related instruments – 80% of total assets (in accordance with Equity Linked Saving Scheme, 2005 notified by Ministry of Finance)An open ended equity linked saving scheme with a statutory lock in of 3 years and tax benefit

b.Debt Schemes

1Overnight FundsInvestment in overnight securities having maturity of 1 dayA debt scheme investing in overnight securities
2Liquid FundsInvestment in Debt and money market securities with maturity of upto 91 days onlyA liquid scheme
3Ultra Short Duration FundsInvestment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 3 months – 6 monthsAn ultra – short term debt scheme investing in instruments with Macaulay duration between 3 months and 6 months
4Low Duration FundsInvestment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 6 months – 12 monthsA low duration debt scheme investing in instruments with Macaulay duration between 6 months and 12 months
5Money Market FundsInvestment in Money Market instruments having maturity up to 1 yearA debt scheme investing in money market instruments
6Short Duration FundInvestment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 1 year – 3 yearsA short term debt scheme investing in instruments with Macaulay duration between 1 year and 3 years
7Medium Duration FundsInvestment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 3 years – 4 yearsA medium term debt scheme investing in instruments with Macaulay duration between 3 years and 4 years
8Medium to Long Duration FundInvestment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 4 – 7 yearsA medium term debt scheme investing in instruments with Macaulay duration between 4 years and 7 years
9Long Duration FundInvestment in Debt & Money Market Instruments such that the Macaulay duration of the portfolio is greater than 7 yearsA debt scheme investing in instruments with Macaulay duration greater than 7 years
10Dynamic Bond FundsInvestment across durationA dynamic debt scheme investing across duration
11Corporate Bond FundsMinimum investment in corporate bonds – 80% of total assets (only in highest rated instruments)A debt scheme predominantly investing in highest rated corporate bonds
12Credit Risk FundsMinimum investment in corporate bonds – 65% of total assets ( investment in below highest rated instruments)A debt scheme investing in below highest rated corporate bonds
13Banking and PSU FundMinimum investment in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions – 80% of total assetsA debt scheme predominantly investing in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions
14Gilt FundMinimum investment in Gsecs – 80% of total assets (across maturity)A debt scheme investing in government securities across maturity
15Gilt Fund with 10 year constant durationMinimum investment in Gsecs – 80% of total assets such that the Macaulay duration of the portfolio is equal to 10 yearsA debt scheme investing in government securities having a constant maturity of 10 years
16Floater FundMinimum investment in floating rate instruments – 65% of total assetsA debt scheme predominantly investing in floating rate instruments

c. Hybrid Schemes

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 [email protected]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 assetclasses.
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

d.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 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 age of majority (whichever is earlier)

e.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

Conclusion –I hope you have now become aware of varies types of Mutual Funds in India. It may help you in choosing the funds suitable to you before blind jumping of investing in funds.
Note:-Don’t forget to read my earlier post “Top 10 Best SIP Mutual Funds to invest in India in 2020“.

Read our latest posts:-

12 Comments

  1. What is your take on Balanced Advantage fund for investment over a horizon of 5 years. Can you please suggest a few in case you recommend them ?

    Reply
    • Dear Chandran,
      If your time horizon is 5 years, then better to stay away from equity.

      Reply
  2. HI YOUR BLOG IS VERY INFORMATIVE, I have recently started investing in MF . My first one is ICICI pro balance advance fund-Growth with single primium of 1lack . Kindly advise which MF i should start investing to achieve my target with maximum profits in next 15 yrs .

    Reply
    • Dear Mahesh,
      The problem in you is chasing the MAXIMUM profit. First define what you are expecting.

      Reply
  3. Hello Sir,

    I am 37 years old and presently, I am running SIP in the following plans for a long-term period of at least 5-7 years:

    1.ICICI Prudential Bluechip Growth – 50%
    2.HDFC Mid-Cap – 30%
    3.Nippon India Small-Cap – 20%

    Considering the present circumstances, is it advisable to continue with the above plans?

    Or should I switch some of these plans or make changes in ratios?

    Reply
  4. Wonderfully explained in details.Thanks for sharing!

    Reply
  5. Very much informative. Thanks

    Reply
  6. VERY LUCID AND INFORMATIVE DETAILS.

    Reply
  7. Information compiled neatly and very helpful

    Reply

Submit a Comment

Your email address will not be published. Required fields are marked *

2 × three =

Share This