Do you know mutual fund scheme recategorisation?

Why this mutual fund scheme recategorisation?

Before this mutual fund scheme recategorisation there were many schemes in fund house having same asset allocation.

For example, Aditya Birla SunLife mutual fund had more than one fund for ELSS, Large cap and mid cap.

That created confusion for investors and they had too check all options.

Recently, The Securities and Exchange Board of India (SEBI) imposed fund houses to optimise their schemes and allowed only one scheme per category. Investors can easily choose scheme as per their goal and risk appetite.

Impact of mutual fund scheme recategorisation

There are 5 categories of schemes: Equity, debt, hybrid, solution oriented and others.

According to SEBI, fund house also has some norms to follow like they can offer 10 types of equity funds, 16 types of bond funds, 6 types of hybrid funds.

Various scheme names have been changed like balanced funds are known as hybrid funds.

Some fund house schemes are also merged to implement this scheme recategorisation.

What should an investor do?

Now when investors watch their portfolio then they may find some changes in that.

So, don’t get panic they just have to hold their schemes. Consult your financial advisor before making any decision. You should track your portfolio and observe if there is any fundamental change is in scheme or just name has been changed of your scheme.

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