Can you tell me about the various categories of debt schemes or income schemes that SEBI has stipulated as mandatory classification for mutual funds?
Answer
Answer
Sr.
No.
Category of Schemes
Scheme Characteristics
Type of scheme (uniform description of scheme)
1
Overnight Fund**
Investment in overnight securities having maturity of 1 day
An open ended debt scheme investing in overnight securities
2
Liquid Fund $ **
Investment in Debt and money market securities with maturity of up to 91 days only
An open ended liquid scheme
3
Ultra Short Duration Fund
Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 3 months - 6 months
An open ended ultra-short term debt scheme investing in instruments with Macaulay duration between 3 months and 6 months
4
Low Duration Fund
Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 6 months- 12 months
An open ended low duration debt scheme investing in instruments with Macaulay duration between 6 months and 12 months
5
Money Market Fund
Investment in Money Market instruments having maturity up to 1 year
An open ended debt scheme investing in money market instruments
6
Short Duration Fund
Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 1 year – 3 years
An open ended short term debt scheme investing in instruments with Macaulay duration between 1 year and 3 years
7
Medium Duration Fund
Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 3 years – 4 years
An open ended medium term debt scheme investing in instruments with Macaulay duration between 3 years and 4 years
8
Medium to Long Duration Fund
Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 4 – 7 years
An open ended medium term debt scheme investing in instruments with Macaulay duration between 4 years and 7 years
9
Long Duration Fund
Investment in Debt & Money Market Instruments such that the Macaulay duration of the portfolio is greater than 7 years
An open ended debt scheme investing in instruments with Macaulay duration greater than 7 years
10
Dynamic Bond
Investment across duration
An open ended dynamic debt scheme investing across Duration
11
Corporate Bond Fund
Minimum investment in corporate bonds- 80% of total assets (only in highest rated instruments)
An open ended debt scheme predominantly investing in highest rated corporate bonds
12
Credit Risk Fund^
Minimum investment in corporate bonds- 65% of total assets (investment in below highest rated
instruments)
An open ended debt scheme investing in below highest rated corporate bonds
13
Banking and PSU Fund
Minimum investment in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions - 80% of total assets
An open ended debt scheme predominantly investing in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions
14
Gilt Fund
Minimum investment in G-Secs- 80% of total assets (across maturity)
An open ended debt scheme investing in government securities across maturity
15
Gilt Fund with 10 year constant duration
Minimum investment in G-Secs- 80% of total assets such that the Macaulay duration of the portfolio is
equal to 10 years
An open ended debt scheme investing in government securities having a constant
maturity of 10 years
16
Floater Fund
Minimum investment in floating rate instruments- 65% of total assets
An open ended debt scheme predominantly investing in floating rate instruments
As you can see from the above classification, the SEBI has given debt fund classification based on duration and also on the basis of credit quality so that appropriate funds can be targeted and purchased based on the risk appetite and return requirements.