InvestmentFinancial Glossary
SEBI Mutual Fund Categorization
Definition
A framework introduced by SEBI in October 2017 that standardized mutual fund scheme categories across all AMCs. It defined 36 categories (11 equity, 16 debt, 6 hybrid, 2 solution-oriented, 1 others) with clear investment mandates for each. No AMC can have more than one scheme per category (with some exceptions).
Why It Matters
Before SEBI's categorization, fund houses had dozens of overlapping schemes with confusing names. The standardization makes comparing funds across AMCs straightforward — a large-cap fund from any AMC must invest 80% in the top 100 stocks by market cap. This rule-based framework protects investors from style drift and ensures transparency.