SEBI Proposes Overhaul of Mutual Fund Scheme Categories
Why in the news
SEBI plans to reshape mutual fund scheme categories to cut overlaps and widen investor choice.
Key facts
- Active equity, hybrid and debt categories broadened.
- New sectoral debt category: over 80% in one sector’s debt, like power or banking.
- New Retirement FoF; one Life Cycle FoF every 5 years, up to 30 years tenure.
Passive versus active
- Passive ETFs and index funds get dedicated rules to curb redundancy.
- Earlier an AMC could launch only one of value or contra.
Exam angle
- Solution-oriented schemes: 2 to 6.
- Sectoral debt threshold: 80%.