SEBI Mutual Fund Categories: Lifecycle Funds and Sectoral Debt Funds
Why in the news
SEBI broadened mutual fund categories to match changing investor needs.
Key facts
- Lifecycle Funds: a new goal-based category that adjusts asset allocation with the investment horizon.
- Horizon: minimum 5 years, maximum 30 years.
- Replaces: retirement and children’s funds, now being discontinued.
| Item | Rule |
|---|---|
| Sectoral debt funds | At least 80% in debt of one sector |
| Credit quality | Corporate bonds rated above AA+ |
| Sectors named | Financial services, energy, infrastructure, housing, real estate |
| InvITs in long-duration funds | Residual money allowed, up to 50% of sectoral composition |
Significance
- AMCs can offer targeted sector exposure via high-rated debt.
Exam angle
- Regulator: SEBI.
- Know the 80% and 50% limits.