Debt funds are no longer going to come packaged simply as short-term income funds or long-term income funds. These categories were found to be very broad and did not define the specific interest rate risk attached to a fund.
For example, a mutual fund with an average maturity of 4 years could also fall in the short-term income fund category along with a fund which has a 1.5-year average maturity. The new categorisation guidelines from Securities and Exchange Board of India (Sebi) now specify more targeted categories around level of interest rate risk and credit risk taken by the fund. Here are some changes that you need to look out for.
