20 Key Changes in SEBI's New MF Scheme Categorisation Circular
1. AMCs can now launch both Value and Contra Funds, with portfolio overlap capped at 50%. Earlier, only one was allowed.
2. New Sectoral Debt Funds introduced (Financial Services, Energy, Infrastructure, Housing, Real Estate) min 80% in AA+ & above.
3. New Life Cycle Funds category, six maturities (30, 25, 20, 15, 10, 5 years) with fixed glide path reducing equity over time.
4. Sectoral/Thematic funds can be launched only from the list notified by AMFI in consultation with SEBI (updated half-yearly)
5. Balanced Hybrid Funds allowed with 40-60% equity allocation. Earlier, AMCs had to choose between Balanced or Aggressive Hybrid.
6. Solution-Oriented Schemes (Retirement & Children's Plans) discontinued, fresh subscriptions stopped and schemes to be merged with similar categories.
7. Mandatory monthly disclosure of category-wise portfolio overlap (equity vs equity, debt vs debt, hybrid vs hybrid) on AMC websites.
8. Equity schemes may deploy residual allocation in money market/liquid instruments, gold/silver instruments, and InvITs.
9. Sectoral/Thematic schemes must limit portfolio overlap to 50% with other equity schemes (except large-cap). Calculated quarterly as average of daily overlap.
10. Existing Sectoral/Thematic schemes get 3 years to comply; non-compliant schemes must merge.
11. Arbitrage Funds' debt exposure restricted to government securities (<1-year maturity) and repo in government bonds only.
12. Low Duration Fund renamed to Ultra Short to Short Term Fund.
13. Long Duration Fund renamed to Long Term Fund.
14. Dynamic Bond Fund renamed to Dynamic Term Fund.
15. Balanced Advantage Fund renamed to Dynamic Asset Allocation Fund.
16. Credit Risk Funds must invest minimum 65% in AA and below-rated bonds (earlier: below AA+).
17. Floating Rate Funds may invest in fixed-rate instruments synthetically converted to floating exposure via swaps/derivatives.
18. Hybrid schemes may invest residual allocation in InvITs (except Arbitrage), ETCDs, Gold ETFs, and Silver ETFs.
19. Equity Savings Funds must maintain net equity exposure between 15-40%.
20. Foreign securities will not be treated as a separate asset class.
