Types Of Mutual Funds

As per SEBI guidelines on Categorization and Rationalization of schemes issued in October 2017, mutual fund schemes are classified as :

• Equity Schemes
• Debt Schemes
• Hybrid Schemes
• Solution Oriented Schemes – For Retirement and Children
• Other Schemes – Index Funds & ETFs and Fund of Funds

While these types will be discussed in greater detail in subsequent articles, here is a diagram giving a brief overview of classification scheme of mutual funds:

• Equity Schemes - invest mainly in stocks - includes Large Cap Funds - invest in top 100 companies by market cap, Mid Cap Funds - next 150 companies, Small Cap Funds - smaller companies, and Sectoral/Thematic Funds - a specific sector or theme
• Debt Schemes - invest in fixed-income instruments like bonds and money market securities - includes Liquid Funds - very short-term, Short Duration Funds, and Corporate Bond Funds
• Hybrid Schemes - mix equity and debt - includes Balanced/Aggressive Hybrid Funds and Conservative Hybrid Funds, in varying equity-debt proportions
• Solution Oriented Schemes - built for a specific goal - includes Retirement Funds and Children's Funds, both with a mandatory lock-in period
• Other Schemes - includes Index Funds & ETFs, which passively track a market index, and Fund of Funds, which invest in other mutual funds