SEBI's new rules for mutual funds: What you should know
SEBI just rolled out fresh rules for mutual funds, shaking up how funds are named and organized.
Now, every fund must fit clearly into one of five categories—equity, debt, hybrid, life cycle funds, or others—and names have to actually match what the fund does.
Words/phrases that highlight/emphasize only the return aspect of the scheme shall not be used in the name of the scheme.
What do the changes mean for you?
If you invest (or plan to), these changes mean it'll be a lot easier to figure out what you're actually buying—they should make fund names clearer and improve transparency around risks.
There are also new types of funds (like contra and sectoral debt) and stricter rules on where your money goes.
Plus, expense ratios will be shown more transparently so you can compare costs easily.
Fund houses have until August 2026 to get with the program—so expect things to get clearer and hopefully cheaper soon!