Categorization and Rationalization of Mutual Fund Schemes

CIRCULAR HO/24/13/15(2)2026-IMD-RAC4/I/5764/2026 February 26, 2026 To, All Mutual Funds All Asset Management Companies (AMCs) All Trustee Companies/ Board of Trustees of Mutual Funds Association of Mutual Funds in India (AMFI) Madam/ Sir, Subject: Categorization and Rationalization of Mutual Fund Schemes 1. SEBI vide circular no. SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 06, 2017, read with circular no. SEBI/HO/IMD/DF3/CIR/P/2020/228 dated November 06, 2020 issued directions regarding categorization and rationalization of Mutual Fund Schemes. The said circulars were consolidated as clause 2.6 of the chapter 2 of Master Circular for Mutual Funds dated June 27, 2024 (hereinafter referred as “Master Circular”). 2. To accommodate the continuously evolving landscape of mutual fund investments and the emergence of opportunities across various asset classes, Clause 2.6 of Chapter 2 of the Master Circular stands superseded as under: 2.6 Categories of Schemes, Scheme Characteristics and Type of Scheme (Uniform Description of Schemes): 2.6.1 The Schemes are broadly classified as under: A. Equity Scheme: Mutual Fund scheme predominantly investing in equity and equity related instruments; B. Debt Scheme: Mutual Fund scheme predominantly investing in debt and debt related instruments; C. Hybrid Scheme: Mutual Fund scheme investing in a mix of asset class i.e. equity, debt, InvITs and commodities related instruments as permitted by SEBI. Page 1 of 12D. Life Cycle Funds E. Other Schemes: i. Fund of Fund Schemes ii. Passive Schemes for e.g. Index Funds / ETFs 2.6.2 ‘Residual portion’ mentioned in the circular refers to the part of a scheme’s corpus not invested in its main, core asset classes as provided in the scheme characteristics. 2.6.3 The details of the scheme categories under each of the aforesaid groups along with their characteristics and uniform description are as under: A. Equity Schemes: Sr. Category Scheme Characteristics Type of scheme (uniform No. of description of scheme) Schemes 1 Multi Cap Minimum investment in equity & equity An open ended equity Fund related instruments - 75% of total assets in the scheme investing across following manner: large cap, mid cap, small cap stocks a) Minimum investment in equity & equity related instruments of large cap companies - 25% of total assets; b) Minimum investment in equity & equity related instruments of mid cap companies - 25% of total assets; c) Minimum investment in equity & equity related instruments of small cap companies - 25% of total assets 2 Large Cap Minimum investment in equity & equity An open ended equity Fund related instruments of large cap companies- scheme predominantly 80% of total assets investing in large cap stocks 3 Large & Minimum investment in equity & equity An open ended equity Mid Cap related instruments of large cap companies- scheme investing in both Fund 35% of total assets large cap and mid cap Minimum investment in equity & equity stocks. related instruments of mid cap stocks- 35% of total assets Page 2 of 124 Mid Cap Minimum investment in equity & equity An open ended equity Fund related instruments of mid cap companies - scheme predominantly 65% of total assets investing in mid cap stocks 5 Small cap Minimum investment in equity & equity An open ended equity Fund related instruments of small cap companies- scheme predominantly 65% of total assets investing in small cap stocks 6 Flexi Cap Minimum Investment in equity & equity An open ended dynamic Fund related instruments – 65% of total assets equity scheme investing across large cap, mid cap, small cap stocks 7 Dividend Scheme should predominantly An open ended equity Yield Fund invest in dividend yielding stocks. scheme predominantly investing in dividend Minimum investment in equity & equity yielding stocks related instruments - 80% of total assets 8 Value Scheme should follow a value An open ended equity Fund investment strategy. scheme following a value Minimum investment in equity & equity investment strategy related instruments - 80% of total assets 9 Contra Scheme should follow a contrarian investment An open ended equity Fund strategy. scheme following Minimum investment in equity & equity contrarian investment related instruments - 80% of total assets strategy 10 Focused A scheme focused on the number of stocks An open ended equity Fund (No. (maximum 30) scheme investing in of Stocks) maximum 30 stocks Minimum investment in equity & equity (mention where the related instruments - 80% of total assets scheme intends to focus, viz., multi cap, large cap, mid cap, small cap) 11 Sectoral Minimum investment in equity & equity An open ended equity Fund related instruments of a particular sector - scheme investing in __ 80% of total assets. sector (mention the specific sector) 12 Thematic Minimum investment in equity & equity An open ended equity Fund related instruments of a particular theme- scheme investing in __ 80% of total assets. theme (mention the specific theme) Page 3 of 12A theme may be a combination of two or more sectors. 13 ELSS – Tax Minimum investment in equity & equity An open ended scheme Saver related instruments - 80% of total assets with attributes in Fund accordance with Equity Linked Saving Scheme, 2005 notified by Ministry of Finance 2.6.3.1 For definition of large cap, mid cap and small cap, clause 2.7 of Master Circular shall be referred. 2.6.3.2 For ESG Funds, para 3.11 of Master Circular shall be referred. 2.6.3.3 In the equity category schemes, Mutual Funds may invest residual portion in equity, money market instruments and other liquid instruments, gold and silver instruments as permitted by SEBI and in InvITs, subject to the ceilings laid out in MF regulations with respect to the respective asset class. 2.6.3.4 Mutual Funds shall be permitted to offer both Value and Contra funds subject to the condition that scheme portfolio overlap between the two schemes shall not be more than 50%. 2.6.3.5 For any scheme offering in sectoral/thematic equity category, Mutual Funds shall ensure that no more than 50% of the schemes portfolios would overlap with other equity schemes in sectoral/thematic category and other equity schemes categories except for large cap scheme. 2.6.3.6 The overlap condition shall be computed on a quarterly basis using the daily portfolio overlap values i.e. the average of daily portfolio overlap values over a quarter. Detailed methodology for computing portfolio overlap is provided at Annexure A to this circular. 2.6.3.7 Existing sectoral/thematic schemes shall ensure compliance with regard to portfolio overlap limits within 3 years from the date of this circular. Schemes unable to meet the portfolio overlap criteria after 3 years shall be mandatorily merged with other schemes as per applicable provisions. Page 4 of 122.6.3.8 In order to realign the portfolio in terms of the limit as mentioned at 2.6.3.5 above, the following glide path may be adopted by mutual funds: Period Realignment expected Year 1 35% of the excess overlap Year 2 Additional 35% Year 3 Remaining 30% 2.6.3.9 Mutual Funds shall launch sectoral/thematic funds as per the list of sectors/themes as published and updated by AMFI in consultation with SEBI on half yearly basis. B. Debt Schemes Sr. Category of Scheme Characteristics Type of scheme (uniform No. Schemes description of scheme) 1 Overnight Investment in overnight securities An open ended debt Fund** having maturity of 1 day scheme investing in overnight securities Overnight funds can deploy, not exceeding, 5% of the net assets of the scheme in G-secs and/or T-bills with a residual maturity of upto 30 days for the purpose of placing the same as margin and collateral for certain transactions. 2 Liquid Fund $ Investment in only Debt and money An open ended liquid ** market securities with maturity of scheme upto 91 days 3 Ultra Short Investment in Debt & Money Market An open ended ultra-short Term Fund instruments such that the Macaulay term debt scheme investing duration of the portfolio is between in instruments such that the 3 months to 6 months Macaulay duration of the portfolio is between 3 months to 6 months 4 Ultra Short to Investment in Debt & Money Market An open ended debt Short Term instruments such that the Macaulay scheme investing in Fund duration of the portfolio is between instruments such that the 6 months to 12 months Macaulay duration of the portfolio is between 6 months to 12 months Page 5 of 125 Money Market Investment in Money Market An open ended debt Fund instruments having maturity up to 1 scheme investing in money year market instruments 6 Short Term Investment in Debt & Money Market An open ended short term Fund instruments such that the Macaulay debt scheme investing in duration of the portfolio is between instruments such that the 1 year to 3 years Macaulay duration of the portfolio is between 1 year to 3 years 7 Medium Term Investment in Debt & Money Market An open ended medium Fund instruments such that the Macaulay term debt scheme investing duration of the portfolio is between in instruments such that the 3 years to 4 years. Macaulay duration of the portfolio is between 3 years Portfolio Macaulay duration under to 4 years anticipated adverse situation is 1 year to 4 years 8 Medium to Investment in Debt & Money Market An open ended medium Long instruments such that the Macaulay term debt scheme investing Term Fund duration of the portfolio is between in instruments such that the 4 to 7 years. Macaulay duration of the portfolio is between 4 years Portfolio Macaulay duration under to 7 years anticipated adverse situation is 1 year to 7 years 9 Long Term Fund Investment in Debt & Money Market An open ended debt Instruments such that the Macaulay scheme investing in duration of the portfolio is greater instruments such that the than 7 years Macaulay duration of the portfolio is greater than 7 years 10 Dynamic Term Investment across duration An open ended dynamic Fund debt scheme investing across duration. 11 Corporate Bond Minimum investment in corporate An open ended debt Fund bonds - 80% of total assets (only in scheme predominantly AA+ and above rated corporate investing in AA+ and above bonds) @ rated corporate bonds Page 6 of 1212 Credit Risk Minimum investment in corporate An open ended debt Fund bonds - 65% of total assets (only in AA scheme predominantly and below rated corporate bonds) @ investing in AA and below rated corporate bonds (excluding AA+ rated corporate bonds) 13 Banking and Minimum investment in Debt An open ended debt PSU Debt Fund instruments of banks, Public Sector scheme predominantly Undertakings, Public Financial investing in Debt Institutions and Municipal Bonds - instruments of banks, 80% of total assets @ Public Sector Undertakings, Public Financial Institutions and Municipal Bonds 14 Gilt Fund Minimum investment in G-secs- 80% An open ended debt of total assets (across maturity) scheme investing in government securities across maturity 15 10-year Minimum investment in G-secs- 80% An open ended debt Constant of total assets such that the Macaulay scheme investing in Maturity Gilt duration of the portfolio is equal to government securities Fund 10 years having a constant maturity of 10 years 16 Floating Minimum investment in floating rate An open ended debt Interest Rates instruments (including fixed rate scheme predominantly Fund instruments converted to floating investing in floating rate rate exposures using instruments (including fixed swaps/derivatives)- 65% of total rate instruments converted assets @ to floating rate exposures using swaps/derivatives) 17 Sectoral Fund Minimum investment in debt & debt An open ended debt related instruments of a particular scheme investing in __ sector across duration (only in AA+ and sector (mention the sector) above rated corporate bonds)- 80% of total assets. Sectoral Debt Funds may be launched in following sectors: Financial Services, Energy, Infrastructure, Housing, Real Estate. Page 7 of 12**Provision as mentioned at Paragraph 8.4.5 of Master Circular shall be followed for Uniform cut-off timings for applicability of Net Asset Value in respect of Liquid Fund and Overnight Fund. $ All provisions mentioned at Paragraph 1.13, 8.4.2.1.c, 12.6 of Master Circular in respect of liquid schemes shall be applicable. Concept of Macaulay's Duration shall be explained in the scheme information document. It is clarified that Macaulay duration shall be mentioned at portfolio level. @ For asset allocation limits considering minimum liquid assets requirement, refer Paragraph 4.6 of Master Circular. For exclusion of investment in units of CDMDF from asset allocation limits, please refer Paragraph 2.10 of Master Circular. 2.6.3.10 With respect to the Medium Term Fund and Medium to Long Term Fund, the characteristics of the scheme shall remain the same under normal circumstances. However, the fund manager, in the interest of investors, may reduce the portfolio duration of the aforementioned schemes up to one year, in case he has a view on interest rate movements in light of anticipated adverse situation. The AMC shall be required to mention its asset allocation under such adverse situation in its scheme information documents. 2.6.3.11 Whenever the portfolio duration is reduced below the specified floors of 3 years and 4 years in respect of Medium Term Fund and Medium to Long Term Fund respectively, the AMC shall be required to record the reasons for the same with adequate justification and maintain the same for inspection. The written justifications shall be placed before the Trustees in the subsequent Trustee meeting. Further, the Trustees shall also review the portfolio and report the same in their Half Yearly Trustee Report to SEBI. 2.6.3.12 Sectoral debt scheme shall be offered after ensuring that there is sufficient availability of investment grade paper in market for the sectors in which sectoral debt fund is offered by the respective AMC. Page 8 of 122.6.3.13 Sectoral exposure limits as outlined in clause 12.9.1 of the Master Circular shall not be applicable to the sectoral debt funds. 2.6.3.14 Mutual Funds may invest the residual portion of debt category schemes in InvITs except for Overnight Fund, Liquid Fund, Ultra-Short Duration Fund, Low Duration Fund and Money Market Fund, subject to the ceilings laid out in MF regulations. C. Hybrid Schemes Sr. Category of Scheme Characteristics Type of scheme (uniform No. Schemes description of scheme) 1 Conservative Investment in equity & equity An open ended hybrid Hybrid Fund related instruments- between scheme investing 10% and 25% of total assets; predominantly in debt instruments Investment in Debt instruments- between 75% and 90% of total assets 2 Balanced Hybrid Equity & Equity related An open ended balanced Fund instruments - between 40% and scheme investing only in 60% of total assets; equity and debt instruments. No Arbitrage is permitted in Debt instruments - between 40% this scheme. and 60% of total assets No Arbitrage would be permitted in this scheme 3 Aggressive Equity & Equity related An open ended hybrid Hybrid Fund instruments- between 65% and scheme investing 80% of total assets; predominantly in equity and equity related Debt instruments- between 20% instruments 35% of total assets 4 Dynamic Asset Investment in equity/ debt that is An open ended dynamic Allocation managed dynamically asset allocation fund Fund investing in debt and equity instruments only 5 Multi Asset Invests in at least three asset An open ended scheme Allocation classes with a minimum allocation Page 9 of 12of at least 10% each in all three investing in __ _ ,__ ,__ asset classes (mention the three different asset classes) 6 Arbitrage Fund Scheme following arbitrage An open ended scheme strategy. investing in arbitrage Minimum investment in equity & opportunities. No investment equity related instruments - 65% in InvITs permitted. of total assets. Asset allocation in case of defensive consideration shall be stated in the SID. Exposure in debt instruments shall be limited to government securities with maturity less than 1 year as well as repo of government bonds only. 7 Equity Savings Minimum investment in equity & An open ended scheme equity related instruments- 65% investing in equity, arbitrage of total assets. and debt Net equity exposure- 15%-40% of total assets Minimum Investment in debt- 10% of total assets. Maximum Arbitrage exposure has to be stated in the SID. Minimum hedged & unhedged exposure to be stated in the SID. Asset Allocation under defensive considerations may also be stated in the Offer Document 2.6.3.15 In the hybrid category schemes, Mutual Funds may invest residual portion in InvITs (except for arbitrage funds), ETCDs, Gold ETFs and Silver ETFs, subject to the ceilings laid out in MF regulations w.r.t the respective asset class. Page 10 of 122.6.3.16 Solution Oriented Schemes: Solutions oriented scheme category is being discontinued w.e.f the date of the circular. Existing schemes in this category shall stop all subscriptions with immediate effect. Such schemes shall be merged with any other scheme having similar asset allocation and risk profile with prior approval from SEBI. 2.6.3.17 Foreign securities will not be treated as a separate asset class. D. Life Cycle Funds Sr. Category Scheme Characteristics Type of scheme (uniform No of description of scheme) Schemes 1 Life Cycle Scheme following glide path strategy based An open ended fund with Funds investing across various asset classes i.e. attributes of pre- Equity, Debt, InvITs, ETCDs, Gold & Silver ETF. determined maturity and glide path for goal based Detailed structure placed at Annexure B investing. E. Other Schemes: Sr. Category of Scheme Characteristics Type of scheme (uniform No Schemes description of scheme) 1 Index Funds/ Minimum investment in securities An open ended scheme ETFs of a particular index (which is replicating/ tracking __ index being replicated/ tracked)- 95% of total assets 2 FoFs (Overseas/ Minimum investment in the An open ended fund of fund Domestic) underlying fund- 95% of total scheme investing in fund assets (mention the underlying funds) 2.6.4 For FoFs with multiple underlying, framework issued vide communication dated June 30, 2025 (Annexure C) to AMFI shall be referred. 2.6.5 For easy identification by investors, in order to bring uniformity in names of schemes for a particular category across Mutual Funds and to ensure that schemes remain “true- to-label”, the scheme name shall be the same as the scheme category. Words/ phrases that highlight/ emphasize only the return aspect of the scheme shall not be used in the name of the scheme. Page 11 of 12Further, the ‘type of scheme’ (mentioned below the scheme name in the offer documents/ advertisements/ marketing material/etc.) should adhere to the description given in the third column of the tables, as applicable. 2.6.6 Clause 1.4.1 of the Master Circular stands deleted. 2.6.7 Pursuant to the issuance of this circular, the nomenclature, investment objective, investment strategy, benchmark and other parameters of each scheme shall be suitably modified (wherever applicable) to bring it in line with the categories of schemes listed above. Such changes shall not be considered as fundamental attribute change. Existing schemes shall comply with the provisions of this circular within 6 months from its date of issuance. 2.6.8 Mutual Funds shall disclose category wise portfolio overlap levels i.e. equity scheme vs other equity schemes, debt scheme vs other debt schemes and hybrid vs other hybrid schemes. Such disclosure shall be published on AMC website for investor communication on a monthly basis. Detailed Methodology for computing portfolio overlap is provided at Annexure A to this circular. 3. This circular shall come into force with effect from the date of this circular. 4. This Circular is issued in exercise of the powers conferred by Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Chapter VI-C of the SEBI (Mutual Funds) Regulations 1996 to protect the interest of investors in securities and to promote the development of, and to regulate the securities market. 5. This Circular is available at www.sebi.gov.in under the link “Legal ->Circulars”. Yours sincerely, Anupma Chadha General Manager Investment Management Department +91-22-26449319 anupmac@sebi.gov.in Page 12 of 12Annexure A Methodology for portfolio overlapping 1. Weightage of each scrip in a scheme shall be calculated as: Investment made in a particular scrip (ISIN) wise as percentage of AUM of the scheme. 2. Portfolio overlap shall be computed at the level of individual ISINs. Only common scrips held by both schemes shall be considered for overlap calculation, scrips not common to both schemes shall be assigned a weightage of zero. 3. For each common scrip, the minimum weightage between the two schemes shall be considered. 4. The overall portfolio overlap between the two schemes shall be the sum of such minimum weightages of all common scrips as indicated in the illustrative table below: Scrips Weightage of Scrip in Scheme A Weightage of Scrip in Scheme B Overlap Scrip P 10% 25% 10% Scrip Q 15% 30% 15% Scrip R 20% 10% 10% Scrip S 10% - 0 Scrip X - 25% 0 Scrip Y 25% 10% 10% Scrip Z 20% - 0 Total 100% 100% 45% 5. Accordingly, portfolio overlap shall be calculated using the following formula: Portfolio Overlap (%) =∑𝑛 min(𝑤 ,𝑤 ) 𝑋 100 𝑖=1 𝑖𝐴 𝑖𝐵 w - represents the weightage of the ith common security (ISIN) in Scheme A iA w - represents the weightage of the ith common security (ISIN) in Scheme B iB w - Market value of security i i Total AUM of the schemeAnnexure B Life Cycle Funds An open ended fund with a target date maturity following a glide path investing in a mix of asset classes i.e. Equity, Debt, InvITs, ETCDs, Gold & Silver ETF. 1. Mutual Fund may launch Life Cycle Funds with a minimum tenure of 5 years and a maximum tenure of 30 years. Such fund may be launched for tenures in multiple of 5 years and a maximum of 6 funds by a Mutual Fund can be active for subscription at any given point in time. Additionally, as each fund reaches less than 1 year to maturity, such fund may be merged with nearest maturity Life Cycle Fund with positive consent from the unitholders. 2. Asset Allocation for Life Cycle Funds to be followed in following manner: For Life Cycle Funds with maturity of 30 years Years to Investment in Equity Investment in Debt (%) Investment in Gold/Silver Maturity (%) ETFs/ETCDs/InvITs (%) 15-30 Years 65-95 5-25 0-10 10-15 Years 65-80 5-25 0-10 5-10 Years 50-65 5-25 0-10 3-5 Years 35-50 25-50 0-10 1-3 Years 20-35 25-65** 0-10 < 1 Years 5-20 25-65** 0-10 For Life Cycle Funds with maturity of 25 years Years to Investment in Equity Investment in Debt (%) Investment in Gold/Silver Maturity (%) ETFs/ ETCDs /InvITs (%) 15-25 Years 65-95 5-25 0-10 10-15 Years 65-80 5-25 0-10 5-10 Years 50-65 5-25 0-10 3-5 Years 35-50 25-50 0-10 1-3 Years 20-35 25-65** 0-10 < 1 Years 5-20 25-65** 0-10 For Life Cycle Funds with maturity of 20 years Years to Investment in Equity Investment in Debt (%) Investment in Gold/Silver Maturity (%) ETFs/ ETCDs /InvITs (%) 15-20 Years 65-95 5-25 0-10 10-15 Years 65-80 5-25 0-10 5-10 Years 50-65 5-25 0-10 3-5 Years 35-50 25-50 0-10 1-3 Years 20-35 25-65** 0-10 < 1 Years 5-20 25-65** 0-10For Life Cycle Funds with maturity of 15 years Years to Investment in Equity Investment in Debt (%) Investment in Gold/Silver Maturity (%) ETFs/ ETCDs /InvITs (%) 10-15 Years 65-80 5-25 0-10 5-10 Years 50-65 5-25 0-10 3-5 Years 35-50 25-50 0-10 1-3 Years 20-35 25-65** 0-10 < 1 Years 5-20 25-65** 0-10 For Life Cycle Funds with maturity of 10 years Years to Investment in Equity Investment in Debt (%) Investment in Gold/Silver Maturity (%) ETFs/ ETCDs /InvITs (%) 5-10 Years 50-65 5-25 0-10 3-5 Years 35-50 25-50 0-10 1-3 Years 20-35 25-65** 0-10 < 1 Years 5-20 25-65** 0-10 For Life Cycle Funds with maturity of 5 years Years to Investment in Equity Investment in Debt (%) Investment in Gold/Silver Maturity (%) ETFs/ ETCDs /InvITs (%) 3-5 Years 35-50 25-50 0-10 1-3 Years 20-35 25-65** 0-10 < 1 Years 5-20 25-65** 0-10 ** Exposure in debt instruments shall be limited to AA & above rated instruments with residual maturity less than the target maturity of scheme. ETCDs shall be based only on Gold/Silver. For years to maturity less than 5 years, all Life Cycle Funds may take equity arbitrage exposure upto 50% in addition to the investment range specified for equity while ensuring that total investment in equity and equity related instruments remains within 65%- 75% in such schemes (as defined above). 3. In order to inculcate financial discipline, in life cycle funds, an exit load of 3% would be chargeable on any exit by an investor within one year of investment; an exit load of 2% within first two years of investment and 1% in the first three years of investment. 4. Life Cycle Funds shall follow benchmark framework as prescribed for Multi Asset Allocation Fund. 5. Life Cycle Funds shall include the maturity date in the nomenclature of the scheme, for e.g. Life Cycle Fund 2055, Life Cycle Fund 2045 etc.Annexure C Standardized Framework for Fund of Fund (FoF) Schemes Applicability- The captioned framework is applicable for all Fund of Fund Schemes having more than one underlying funds. CATEGORISATION OF FUND OF FUND SCHEMES (with multiple underlying Funds) AMCs may launch FOFs with multiple underlying funds under the following broad categories: S.no. Category of FOF Sub-Category Description 1. Equity oriented FOF Diversified FOF FOFs that invests in schemes which are (Domestic) based on varied market caps e.g. large-cap, mid-cap, Nifty 100, Nifty 50 etc are allowed under this sub-category and these underlying schemes should not be based on factors like momentum, volatility, etc. Sectoral FoF based on /Thematic FOF  a single sector; or  a single theme; or  Multi-sector. 2. Debt oriented FOF These FoFs shall invest in domestic debt (Domestic) oriented MF schemes based on  different categories of debt schemes as per paragraph 2.6 of Master Circular on Mutual Fund dated June 27, 2024; or  a single category of debt schemes as per paragraph 2.6 of Master Circular on Mutual Fund dated June 27, 2024. 3. Hybrid Investment in underlying Equity oriented Aggressive FoF(Domestic) schemes- 65% to 80%; Hybrid FoF Investment in underlying Debt oriented schemes - 20% to 35%. Investment in underlying Equity oriented Conservative schemes- 10% to 25%; Hybrid FoF Investment in underlying Debt oriented schemes - 75% to 90%. Investment in underlying Debt oriented Income plus schemes – up to 65%. Arbitrage FOF Balance investment in only arbitrage based underlying schemes. Investment in equity / debt oriented schemes Dynamic Asset that are managed dynamically Allocation FoF Investment in Equity oriented schemes, Debt Multi Asset oriented schemes + Commodity based Allocation FoF schemes* (and any other asset class basedscheme as permissible by SEBI from time to time), subject to minimum investment of 10% in each of the three categories of schemes. *currently only gold and silver based passive schemes are allowed to be launched under commodity based schemes. 4. Commodity based Investment in commodity funds which invest FoF(Domestic) in Gold and/or Silver or any other commodity that may be permitted by SEBI from time to time. Equity oriented FOF (Overseas) FOFs investing in overseas equity oriented Country schemes that provides exposure to the equity specific Equity markets of a particular country FoF FOFs investing in overseas equity oriented Thematic/Sector schemes that are based on a single based Equity theme/sector FoF FOFs investing in overseas equity oriented 5. Overseas FoF1 Region specific schemes that provides exposure to the equity Equity FoF2 markets of a particular region Debt oriented FOF (Overseas) FOFs investing in overseas debt oriented Country schemes that provides exposure to the debt specific Debt markets of a particular country FoF FOFs investing in overseas debt oriented Region specific schemes that provides exposure to the debt Debt FoF2 markets of a particular region 6. Domestic and FOFs investing in domestic and overseas Diversified Overseas FOF1 equity oriented schemes which should not be Equity FOF based on the factors like momentum, quality, etc. Minimum investment in underlying domestic and overseas schemes should be at least 35% each. FoF investing in domestic and overseas Sectoral equity schemes based on /Thematic  a single sector; or based Equity  a single theme; or FOF  Multi-sector. Minimum investment in underlying domestic and overseas schemes should be at least 35% each. FOFs investing in domestic and overseas Debt oriented debt oriented schemes. FOF Minimum investment in underlying domestic and overseas schemes should be at least 35% each. Note:1. W.r.t Overseas FoFs, the AMC to take into account certain parameters such as liquidity in such overseas funds, a certain threshold of collective AUM following the overseas indices of such overseas funds, compliance of such indices with portfolio concentration norms for passive indices etc. 2. List of regions for launch of Region specific FOFs is placed at Annexure I. Further, AMFI in consultation with SEBI may define additional list of “regions” for Region specific FOFs. 3. Minimum investment in FOF schemes -95% of total assets (in line with the categorisation circular). AMC has to ensure that the remaining portion of the investment shall not be in contrast to the strategy of the scheme. 4. AMCs shall ensure that only those underlying overseas schemes are selected which have exposure in securities as defined under Securities Contract (Regulation) Act, 1956 and other applicable regulations/guidelines. The AMC may launch schemes in each of the above mentioned categories of FoFs with multiple underlying under the following three options: a) Active option- FOFs investing in multiple active funds. b) Passive option- FOFs investing in multiple passive funds. c) Active and passive option - FOFs investing in multiple active and passive funds. Benchmark List of appropriate benchmarks that could be used by Mutual funds for the respective category of FOF schemes is placed at Annexure II. Nomenclature of FOF Schemes The nomenclature of FOF schemes for each category of FOF schemes is placed at Annexure III. Number of FoFs permitted to be launched by an AMC Number of FoF schemes permitted to the Mutual funds under above-mentioned categories of FOF schemes is placed at Annexure IV. If the number of existing FoF schemes of a Mutual fund under any particular category is more than the number of FoFs permitted under the particular sub-category of FoF as mentioned at Annexure IV, such FoFs will be grandfathered. However, Mutual fund will not be allowed to launch more FoFs under that particular sub-category. Re-categorisation of Existing FOF Schemes Mutual funds are required to align/re-categorize their existing FoFs in one of the aforesaid sub- category of FOF schemes by making necessary changes in the scheme attributes by August 31, 2025. In this regard, it is to be noted that such changes will not be considered as Fundamental Attribute Changes (FAC). Further, in case the number of existing FoFs of an AMC under any particular category/sub- category is greater than or equal to the number of FoFs permitted under that category/sub- category as mentioned in Annexure III:a) The AMC may merge the existing FoF schemes falling under a category/sub-category to reduce the number of FoFs under that category/sub-category in compliance with relevant SEBI MF Regulations/ Circulars issued thereunder; b) If the AMC is somehow not able to merge existing FoFs falling under a category/sub- category due to scheme features, investment objective, etc., then such existing FoF schemes may be grandfathered from the requirement of restricted number of FOFs in particular category/sub-category based on request and rationale received from the concerned AMC. Further AMCs while making the request for grandfathering for overseas FOF category of schemes may also include distinct terminology in the scheme name for the purpose of providing more clarity to the unitholders, such distinct term may include US Treasury 1-3 year, NASDAQ, etc.Annexure- I Sr.No. Name of Regions 1 ASEAN 2 Europe 3 Asia 4 Asia Pacific 5 Africa 6 Middle East 7 North America 8 South America 9 Oceania/AustraliaAnnexure- II S.No. Type of FoF Benchmark to be used 1 Equity oriented FOF (Domestic) NIFTY 500 TRI or S&P BSE 500 TRI or Tier 1 Benchmark for closely related to the Theme/factor 2 Debt oriented FOF (Domestic) NIFTY Composite Debt Index A-III or, CRISIL Dynamic Bond A-III Index or benchmark close to the duration/credit profile Aggressive Hybrid FoF Conservative Hybrid FoF Tier 1 Benchmark – Hybrid category Dynamic Asset Allocation FoF Policy framework for Composition of Benchmark of Income Plus Arbitrage FoF 1) The benchmark should represent both debt and arbitrage schemes , in line with the weights under asset allocation of the schemes. 2) Additionally, the weightages of these benchmarks should be at least the minimum of the asset allocation range of that particular asset class. 3) AMCs are advised to use an appropriate combination of the broad indices that represent each asset class as mentioned below: Broad Fixed Income Indices NIFTY Short Duration Debt Index 3 Hybrid FOF(Domestic) NIFTY Composite Debt Index CRISIL Short Term Bond Fund Index Income Plus Arbitrage FOF CRISIL 10 year Gilt Index CRISIL Composite Bond Fund Index Arbitrage Fund Indices NIFTY 50 Arbitrage CRISIL Arbitrage Index 4) Additionally, AMCs need to ensure the following requirements: a. While constructing the benchmark for a Income plus arbitrage FOF scheme, once a benchmark index is selected for underluing debt and arbitrage schemes the same should not be changed. For example – if for debt schemes, NIFTY Short Duration Debt Index is chosen, it should not be changed on an ad-hoc basis by the AMC and may be changed only after following a due process including prior intimation/ approval of SEBI. b. Likewise, once weights for underlying debt and arbitrage schemes for constructing the benchmark is decided by an AMC, the AMC may not change the weights without following due process including prior intimation/ approval of SEBI. c. The weights of underluing debt and arbitrage schemes in the benchmark may be allotted suitably based on Scheme Information Document/ Investment Pattern of Scheme. For example, it should not happen that while the actual investment in debt by the scheme is generally 10%, the benchmark weight for the debt index is 50%. d. Further, the respective benchmark to be used for underluing debt and arbitrage schemes should be only from the aforesaid limited set of Indices mentioned hereinabove. Multi Asset Allocation FoF Multi Asset- As per the policy framework for composition of benchmark of multi asset allocation fund category Gold + Silver (or any other allowed Commodities) 4 Commodity based Weightages of these benchmarks should be at least the minimum of the investment range of that particular underlying fund. FoF(Domestic) 5 Overseas FOF Benchmark of the underlying overseas MF schemes or broad market benchmark or weightages of these benchmarks should be at least the minimum of the investment range/duration/credit profile of that particular overseas underlying fund as per the SID. 6 Domestic and Overseas FOF Benchmark of the underlying overseas MF schemes or broad market benchmark or weightages of these benchmarks should be at least the minimum of the investment range/duration/credit profile of that particular overseas underlying fund as per the SID.Annexure- III Available Proposed Name S. No. Type of FoF Active option Passive option Active and Passive option Equity oriented FOF(Domestic) <<Name of Mutual Fund>> Diversified Equity <<Distinct Keyword>> Active FOF <<Name of Mutual Fund>> Diversified Equity <<Distinct Keyword>> Omni FOF 1 · Diversified FOF I lf a rt gh ee +in mve ids ct am pe on rt fin le t xh ice a u pn +d me ur ll ty ii cn ag p s wch ile l m bee s u sis e dac . r Ho os ws u ep veto r, 2 if c ta hp es i ni.e ve. l sa tr mg ee n + tm inid tc ha ep u o nr d f ele rlx yi ic na gp s+ cm hu el mtic ea s p is, t ah ce rn o sn sa mm oe r eo f t hth ae n u 2n cd ae pr sly ti hn ag n c a thp es wi.e o. r d <<Name of Mutual Fund>>Diversified Equity <<Distinct Keyword>> Passive FOF I lf a rt gh ee +in mve ids ct am pe on rt fin le t xh ice a u pn +d me ur ll ty ii cn ag p s wch ile l m bee s u sis e dac . r Ho os ws u ep veto r, 2 if c ta hp es i ni.e ve. l sa tr mg ee n + tm inid tc ha ep u o nr d f ele rlx yi ic na gp s+ cm hu el mtic ea s p is, t ah ce rn o sn sa mm oe r eo f t hth ae n u 2n cd ae pr sly ti hn ag n c a thp es i.e. "all cap" will be used. word "all cap" will be used. · Sectoral /Thematic FOF <<Name of Mutual Fund>> <<name of sector/theme/multi sector>> Active FOF <<Name of Mutual Fund>> <<name of sector/theme/multi sector>> Passive FOF <<Name of Mutual Fund>> <<name of sector/theme/multi sector>> Omni FOF 2 Debt oriented FOF(Domestic) BasB ea ds e od n F o d on iv r s e Ei r xn s ag if ml ie e p dd l ee d b e : t b D c t i a sc tt a ie ntg e co tg r o Ky er y- y w < - < o<N r< dNa m ca ome u eo ld f o M bf eMu 't u Su t ha u ol a rF lo t u F r Dn ud un> rd a> > t >< io < d nn i va +em Crs re i e fo dief i tdc Ra dt ie se b kg 'to , < 'r Oy < vDo eif s r d t nie in gb c ht t t f K +u e Ln iy qd w u> o> idr A 'd , c > et > ti cv A .e c t F ivO eF F OF BaseB da ose nd d o ivn e s ri sn ifg iele d d de eb bt t c ca at te eg go or ry y - -< << <N Na am me e o of f M Mu ut tu ua al l F o Fu urn nd d> >> > < d< in vea rm sie fi eo df c da et be tg o <<ry D o isf t d ine cb tt K f eu yn wd o>> rdP >a >s s Piv ae s sF ivO eF FOF BasB ea ds oe nd F do oin rv Ees xrin s aig mfile e pd ld e de :b e Dbt itc s a c tiat ne t cg e tgo Kr oy er y y- w -< o< < rN < dNa cm a om ue e lo d f o b fM e M u ' ut Su hta u ol a r F o l t u Fr Dun ud n rd> a> > ti >< o < ndn i +va e Cm r rse eif do ie if td c R a d it see kbg 't ,o '< Or <y vD o ei rf s ntd i ie n gb c htt t +Kfu Le in y qd w u> io d> r ' ,O d e>m t> cn O . i m F nO i F FOF Hybrid FoF(Domestic) · Aggressive Hybrid <<Name of Mutual Fund>> <<Aggressive Hybrid>> Active FOF <<Name of Mutual Fund>> <<Aggressive Hybrid>> Passive FOF <<Name of Mutual Fund>> <<Aggressive Hybrid>> Omni FOF · Conservative Hybrid <<Name of Mutual Fund>><<Conservative Hybrid>> Active FOF <<Name of Mutual Fund>><<Conservative Hybrid>> Passive FOF <<Name of Mutual Fund>><<Conservative Hybrid>>Omni FOF 3 · Dynamic Asset Allocation <<Name of Mutual Fund>> <<Dynamic Asset Allocation>> Active FOF <<Name of Mutual Fund>> <<Dynamic Asset Allocation>> Passive FOF <<Name of Mutual Fund>> <<Dynamic Asset Allocation>> Omni FOF · Income plus Arbitrage <<Name of Mutual Fund>> <<Income plus Arbitrage>> Active FOF <<Name of Mutual Fund>> <<Income plus Arbitrage>> Passive FOF <<Name of Mutual Fund>> <<Income plus Arbitrage>>Omni FOF · Multi – Asset <<Name of Mutual Fund>> <<Multi – Asset>> Active FOF <<Name of Mutual Fund>> <<Multi – Asset>> Pssive FOF <<Name of Mutual Fund>> <<Multi – Asset>> Omni FOF 4 Commodity based FoF(Domestic) - <<Name of Mutual Fund>> <<Name of commodity/commodities >> Passive FOF - Overseas FoF · Country specific Equity FoF <<Name of Mutual Fund>> <<name of country>> specific Equity Active FOF <<Name of Mutual Fund>> <<name of country>> specific equity Passive FOF <<Name of Mutual Fund>> <<name of country>> specific Equity Omni FOF · Thematic/Sector based Equity FoF <<Name of Mutual Fund>> <<name of theme/sector>> overseas Equity Active FOF <<Name of Mutual Fund>> <<name of theme/sector>>overseas Equity Passive FOF <<Name of Mutual Fund>> <<name of theme/sector>> overseas Equity Omni FOF 5 · Region specific Equity FoF <<Name of Mutual Fund>> <<name of region>>specific Equity Active FOF <<Name of Mutual Fund>> <<name of region>>specific Equity Passive FOF <<Name of Mutual Fund>> <<name of region>>specific Equity Omni FOF · Country specific Debt FoF <<Name of Mutual Fund>> <<name of country>> specific Debt Active FOF <<Name of Mutual Fund>> <<name of country>> specific Debt Passive FOF <<Name of Mutual Fund>> <<name of country>> specific Debt Omni FOF · Region specific Debt FoF <<Name of Mutual Fund>> <<name of region>> specific Debt Active FOF <<Name of Mutual Fund>> <<name of region>> specific Debt Passive FOF <<Name of Mutual Fund>> <<name of region>> specific Debt Omni FOF Domestic and overseas FOF <<Name of Mutual Fund>> domestic and overseas diversified equity<<Distinct Keyword>>Active FOF <<Name of Mutual Fund>> domestic and overseas diversified equity <<Distinct Keyword>>Omni FOF · Diversified Equity FOF laIf r gth ee + i mnv ide cs atm p e on r t f li en x t ich ae p u +n md ue lr tl iy ci an pg wsc ilh l e bm e e us s eis d a . c Hr oo wss e u vp et ro , i 2 f tc ha ep is n i v.e e. s tla mrg ee n t+ im n i td hc ea up n o dr e f rl le yx ii nc ga p sc+ hm eu mlt eic sa ip s , a t ch re on ss n mam ore e o tf h t ah ne 2 u cn ad pe sr l ty hi an ng c tha ep s w i o.e r. d <<Name of Mutual Fund>> domestic and overseas diversified equity <<Distinct Keyword>>Passive FOF If t lah re g i en +ve ms it dm cae pn t o i rn f t leh xe i cu an pd +e mrl uyi ln tig c as pc h we im ll e bs e i us sa ec dro . Hss o u wp et vo e 2 r, c ia f p ths ei. e in. vla er sg tme + em nti d inc a thp e o ur nfl de ex ric lya ip n+ gm scu hlt ei mca ep s, it sh ae cn r n oa ssm me oo rf e t h the a u nn 2d e cr al py sin tg h aca np ts h i e. e. "all cap" will be used. word "all cap" will be used. 6 · Sectoral /Thematic based Equity FOF <<Name of Mutual Fund>> domestic and overseas <<name of sector/theme/multi sector>> Active FOF <<Name of Mutual Fund>> domestic and overseas <<name of sector/theme/multi sector>> Passive FOF <<Name of Mutual Fund>> domestic and overseas <<name of sector/theme/multi sector>> Omni FOF Debt oriented FOF BasB ea ds oe nd F do oin v r es Eri xn s aig f mile e pd d l ede b e : bt D tc i sa c tat ie ntg e ctgo r o Ky er y- y w -< < o<N r< dNa cm a ome u e lo d f o bfM eMu ' ut Su t ha u ol a rF lo t u F r Dun ud n rd> a> > t > i< o < d nn i v +a e m Crs re i ef o dief itd c Ra d it e se b kg 't ,o < 'r O<y vD o eif s r td nie in gb c htt t Kf +u e Ln iy qd w u> o i> dr 'A d , >c et > ti cAv .e c t iF vO e F FOF BaseB da s oe nd d o ivn e s ri sn ifg il ee d d de eb bt t c ca at te eg go or ry y - -< << <N Na am me e o of f M Mu ut tu ua al lF o Fu urn nd d> >> > < d< in va em rsie f io ef d c da ete bg t o <r <y D o isf t d ine cb tt K f eu yn wd> o> rdP >a >ss Piv ae s sF iO veF FOF BB aa ss ee dd o o nn d s ii vn eg rl se if id e Fe d ob rdt Eec xba att m e cg a po t ler ey g : o - D r< y is< t -N i n<a c<m tN Ke a e mo yf we M oou rf dt Mu ca u ol t u F u lu dan l b Fd eu> n '> Sd d h>o o>m r do te or Ds mt ui rec a sa ttn ii ocd n a o n +v d Ce r o rs eve dea ir ts s < Re< a isn s k a d ',m i 'v Oe e v ro esf i r fc nia e igt de h <g t< +o D Lr iy i qs o utif in dd c 'e ,t eb K tt e c f y .u wn od r> d> > O >Om mni n iF FO OF FAnnexure- IV Number of FoFs permitted to be launched by an AMC S. No. Type of FoF Active option Passive option Active and Passive option Equity oriented FOF(Domestic) · Diversified FOF 2 2 2 1 Sector / themes- 1 scheme per sector/ Sector / themes- 1 scheme per Sector / themes- 1 scheme per sector/ · Sectoral /Thematic FOF theme sector/ theme theme Multi Sector - 1 scheme Multi Sector- 1 scheme Multi Sector- 1 scheme Debt oriented 2 2 2 2 FOF(Domestic) Hybrid FoF(Domestic) · Aggressive Hybrid 1 1 1 · Conservative Hybrid 1 1 1 3 · Dynamic Asset Allocation 1 1 1 · Income plus Arbitrage 1 1 1 · Multi – Asset 1 1 1 Commodity based 4 N.A 1 N.A FoF(Domestic) Overseas FoF · Country specific Equity FoF 1 scheme per country 1 scheme per country 1 scheme per country Sector / themes- 1 scheme per sector/ Sector / themes- 1 scheme per Sector / themes- 1 scheme per sector/ 5 · Thematic/Sector based theme sector/ theme theme Equity FoF Multi-Sector- 1 scheme Multi-Sector- 1 scheme Multi-Sector- 1 scheme · Region specific Equity FoF 1 scheme per region 1 scheme per region 1 scheme per region · Country specific Debt FoF 1 scheme per country 1 scheme per country 1 scheme per country · Region specific Debt FoF 1 scheme per region 1 scheme per region 1 scheme per region Domestic and overseas FOF · Diversified Equity FOF 2 2 2 6 Sector / themes/multi-sector- 1 · Sectoral /Thematic based Sector / themes/multi-sector- 1 scheme Sector / themes/multi-sector- 1 scheme scheme per sector/ theme/multi- Equity FOF per sector/ theme/multi-sector per sector/ theme/multi-sector sector · Debt oriented FOF 2 2 2