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SEBI's new rules on fund categorization: Key details here
SEBI is shaking up how mutual fund schemes are labeled and managed, aiming to cut down on overlap between similar funds.
Now, Value and Contra funds can only be up to 50% alike in their portfolios, with checks at launch and every six months after.
The idea is to help investors see real differences between options.
What happens if a fund has over 50% stock overlap?
If a fund's overlap goes over 50%, Asset Management Companies have 30 days to fix it (plus another 30 if SEBI agrees).
Funds will also get more freedom to invest across things like stocks, debt, and REITs for better mix.
SEBI even wants to rename some debt schemes—like switching "Low Duration Fund" to "Ultra Short to Short Term Fund"—to keep things clearer for everyone.