On Friday, SEBI introduced a circular stating that mutual funds have to sort all schemes under asset categories as per their investment strategies. The aim behind this decision is to make it easier for the investors to choose the right plan from a pile of similar schemes.
The market scrutineer has said that the mutual fund schemes will be classified under five roofs – equity, debt, hybrid, solution-oriented, and other schemes. Further, only one product can be held under one category except index funds, fund of funds, or sector schemes. In equity schemes, there will be 10 sub-categories counting multi-cap, large-cap and mid-cap. In debt, there will be 16 groups. Lastly, the hybrid schemes will have 6 categories. Also, the mutual funds with more than one product under a category will have to change or merge the fundamental feature of the scheme.
The Economic Times report also noted that, the market regulator has defined large-cap, mid-cap and small-cap stocks in the circular. Now a large-cap stock will entail the top 100 companies (in terms of market value), a mid-cap stock will be among 101 and 250, and a small-cap stock will involve companies ranking beyond 250.