Investors need not get rattled by markets regulator Sebi’s move to recategorise mutual fund schemes. Instead, they should look into the changes carefully to see if the new scheme structure gels well with their overall portfolio strategy or not, and then take a final decision.
In October last year, Sebi had asked all fund houses in the country to align their schemes under a broad framework that the regulator put in place. The fund industry was given six months to complete the process and it is now expected that this recategorisation should be over by the end of the month.
The main objective for the recategorisation of mutual funds is to help investors select schemes easily. According to Sebi, the schemes should be “clearly distinct in terms of asset allocation, investment strategy, etc”. The markets regulator divided mutual fund schemes into five broad groups, which are further divided into a total 36 categories.
