SEBI has reportedly asked fund houses not to use the word ‘Prudence’ in their balanced funds. This is to reduce confusion among investors and expedite scheme consolidation.
Currently, five houses – HDFC, L&T, Mirae, Union and IDBI are using the word ‘Prudence’ in their balanced funds.
While two fund houses have confirmed that they have changed the name from ‘Prudence’ to ‘Aggressive Hybrid Fund’, another fund house said that they are yet to finalize the name. Two fund houses did not answer our calls.
“We have received a call from SEBI asking us not to use the word ‘Prudence’ in balanced funds. Hence, we have changed the name of the fund. However, we have received SEBI’s go ahead for our other products,” said the CEO of one such fund house.
Fund official of another AMC told Cafemutual that SEBI defines balanced fund as 50% equity and 50% debt. “Anything that goes beyond 50% equity exposure is aggressive hybrid fund. Going by this logic, even existing balanced funds will have to change their names.”