Security Exchange Board of India has sent a directive to all the asset management companies on rationalization and re-categorization of their mutual fund schemes. As per the circular, all AMCs are required to re-classify their existing schemes based on their asset allocation to respective schemes. The aim is to simplify the process of understanding the mutual fund offers by a layman.
SEBI has proposed categorization and rationalization of mutual fund schemes. This is to ensure that all schemes are distinct in terms of asset allocation and investment strategy.
If you can’t find the name of your scheme in which you have invested your money, don’t get panic. your money is safe it’s just a name change that has happened. You need to find the new name of your invested scheme. Now you must be thinking how can I find the new name of the scheme I have invested in? Here is the list of all the schemes for which name change has happened by respective AMCs. Not only that, I have also provided the scheme type so that you can check whether the scheme type also got change or not.
The proposed categories are as under
- 10 types of equity funds
- 16 types of bond funds
- 6 types of hybrid funds
As per the new categorization, a large-cap fund must have minimum 80% of the money invested in large-cap stocks. This will help to compare the scheme more effectively.
As an investor, you need to understand the category of mutual fund you are investing into. You may change or stop investing or can redeem the particular fund if you think the new scheme doesn’t suit your risk profile. The redemption under such scenario would be free of cost(without exit load). However, exit option is not compulsory and should only be exercised if you think the scheme no longer serve the purpose you have opted for. The exit will also cost you capital gain tax (if applicable) which is recently implemented from 1st April 2018.
I would advise the investors to relook at their investment plans and shuffle your schemes if needed. If you have very little knowledge about investment, I would suggest you stick with multi-cap funds where the risk is medium as compared to equity schemes.
Here is the list of mutual fund schemes with old and new name and category.