As per the new categorisation of mutual funds, capital markets regulator Securities and Exchange Board of India (Sebi) has notified 16 debt fund categories. This is significantly more than the 6-7 that existed earlier. The objective is to have clearly demarcated portfolios for investors to choose rather than overlapping schemes that don’t do things much differently than others, and to distinguish products on the basis of risk.
What does this change mean for the debt funds you currently invest in? Should you change the allocation or the scheme? You will certainly have to re-evaluate your holdings. While there is no need to alter your fixed income investment strategy, individual schemes will need a relook.
