The Securities and Exchange Board of India (SEBI) has categorized Equity Mutual Fund Schemes into ten types. The first five schemes can be understood from the figure below, these are Large Cap Fund, Mid Cap Fund, Large & Mid Cap Fund, Small Cap Fund, and Multicap Fund.
Now, the obvious question would be, what are large cap, mid cap, and small cap? Well, the SEBI has defined them as:
a. Large Cap: 1st -100th company in terms of full market capitalization
b. Mid Cap: 101st -250th company in terms of full market capitalization
c. Small Cap: 251st company onwards in terms of full market capitalization
Now that we know these terms, let’s look at all the ten types of equity schemes and their characteristics. All of these are open-ended equity schemes.
Scheme | Predominantly invests in… | Minimum investment in equity/equity related instruments as proportion of total assets |
Large Cap Fund | large cap stocks | 80% |
Mid Cap Fund | mid cap stocks | 65% |
Large & Mid Cap Fund | both large cap and mid cap stocks | Large cap – 35%, mid cap – 35% |
Small cap Fund | small cap stocks | 65% |
Multi Cap Fund | across large cap, mid cap, small cap stocks | 65% |
Dividend Yield Fund | dividend yielding stocks | 65% |
Value Fund | invest in stocks that are deemed to be undervalued in price based on fundamental characteristics | 65% |
Contra Fund | Stocks that are under-performing at that point in time | 65% |
Focused Fund | maximum 30 stocks (not much diversification) | 65% |
Sectoral/ Thematic | a particular sector or theme | 80% |
ELSS (Equity Linked Saving Scheme) | statutory lock in of 3 years and offer tax benefit | 80% |
Now, that we have known the equity schemes, you might be interested in learning about the different types of debt schemes. Browse it, here.
