Mutual fund categories, explained simply.
SEBI groups every mutual fund scheme into a category with clear rules on what it may invest in. Knowing the category tells you most of what to expect from a fund.
Large & Mid Cap Funds
Invest at least 35% in large-cap companies (the 100 biggest listed companies) and at least 35% in mid-cap companies (the 101st to 250th), giving a mi…
73 scheme plansLarge Cap Funds
Invest at least 80% in large-cap companies, the 100 biggest listed companies in India by market value. They are usually the steadiest part of equity …
68 scheme plansMid Cap Funds
Invest at least 65% in mid-cap companies (the 101st to 250th largest listed companies). Mid caps can grow faster than large caps but are more volatil…
66 scheme plansSmall Cap Funds
Invest at least 65% in small-cap companies (251st and smaller). They carry the highest risk among diversified equity funds and can fall much more tha…
71 scheme plansMulti Cap Funds
Must invest at least 25% each in large-, mid- and small-cap companies, so a meaningful part is always in smaller companies.
65 scheme plansFlexi Cap Funds
Invest at least 65% in equity and can move freely between large, mid and small companies as the fund manager sees fit.
92 scheme plansFocused Funds
Hold at most 30 stocks, with at least 65% in equity. A concentrated portfolio means each holding matters more, for better or worse.
56 scheme plansELSS Tax Saver Funds
Invest at least 80% in equity and come with a 3-year lock-in. Investments can qualify for a tax deduction of up to ₹1.5 lakh a year under the old tax…
77 scheme plansValue & Contra Funds
Follow a value strategy (buying companies that look cheap relative to their worth) or a contrarian strategy (buying what is currently out of favour),…
56 scheme plansDividend Yield Funds
Invest at least 65% in companies that pay relatively high dividends.
Learn moreSectoral & Thematic Funds
Invest at least 80% in one sector (such as banking or technology) or one theme (such as consumption or manufacturing). Their fortunes depend heavily …
503 scheme plansAggressive Hybrid Funds
Invest 65–80% in equity and 20–35% in debt, so some of the equity risk is cushioned by bonds.
59 scheme plansConservative Hybrid Funds
Invest 75–90% in debt and 10–25% in equity, aiming for steadier returns with a small equity component.
35 scheme plansBalanced Advantage Funds
Change their equity and debt mix dynamically, often using market valuations, to manage risk.
76 scheme plansMulti Asset Allocation Funds
Invest at least 10% each in at least three asset classes, such as equity, debt and gold.
74 scheme plansArbitrage Funds
Earn from price differences between the cash and futures markets, with at least 65% in equity-related positions. Risk is generally low and returns ar…
77 scheme plansEquity Savings Funds
Combine equity, arbitrage positions and debt (at least 65% in equity including arbitrage, at least 10% in debt).
44 scheme plansOvernight Funds
Invest in securities that mature the next day. They carry very low interest-rate and credit risk.
79 scheme plansLiquid Funds
Invest in debt and money-market securities maturing within 91 days. They are commonly used for emergency funds and short-term parking.
95 scheme plansUltra Short Duration Funds
Hold debt with a Macaulay duration of 3 to 6 months.
109 scheme plansLow Duration Funds
Hold debt with a Macaulay duration of 6 to 12 months.
Learn moreMoney Market Funds
Invest in money-market instruments maturing within one year.
58 scheme plansShort Duration Funds
Hold debt with a Macaulay duration of 1 to 3 years.
49 scheme plansMedium & Long Duration Funds
Hold debt with a longer duration (3 years and more), so their value is more sensitive to interest-rate changes.
51 scheme plansCorporate Bond Funds
Invest at least 80% in corporate bonds rated AA+ and above.
43 scheme plansBanking & PSU Funds
Invest at least 80% in debt of banks, public sector undertakings and public financial institutions.
40 scheme plansGilt Funds
Invest at least 80% in government securities, so credit risk is minimal, but prices move with interest rates.
64 scheme plansDynamic Bond Funds
Move across short and long durations depending on the fund manager's view of interest rates.
46 scheme plansCredit Risk Funds
Invest at least 65% in bonds rated AA and below. Higher interest comes with a real risk of default.
24 scheme plansFloater Funds
Invest at least 65% in floating-rate debt, whose interest resets with market rates.
24 scheme plansRetirement Funds
Are designed for retirement saving, with a lock-in of 5 years or until retirement age, whichever is earlier.
58 scheme plansChildren's Funds
Are meant for a child's goals, with a lock-in of 5 years or until the child turns 18, whichever is earlier.
26 scheme plansHave a question about this topic?
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