Mutual funds are of various types. While earlier several schemes were categorised under one type, now according to the guidelines of the Security and Exchange Board of India (Sebi), it has been stated that each category will have only one type of scheme in it. These 6 ways new classification of mutual fund schemes will impact the investor would help people in having an easier way to choose a scheme.
While there are such simplified choices, the options are very less. With only equity, debt, hybrid, solution-oriented and others, the investors would have a better view of which scheme would be better for them. Each classified schemes also have some sub schemes that makes it possible for the investor to know in which kind of scheme they would want to invest. The sub schemes under a category would have similar characteristics, and maybe some of them would even be a duplicate of each other. While the similar ones with just a slight difference can be compared among the investors to choose the right one, the duplicate ones are either merged, renamed or one of the schemes would entirely change.
There has also been a rise in fund corpus due to this classification. Since some of the schemes are duplicates but have a different name, they are now merged into one; there has been a sharp rise in the funds. These have proved to be a boon for the investors as they can invest in these merged schemes and have a better return on their savings.
Thus, it is essential for investors to know about the current classification of schemes. You may refer to https://economictimes.indiatimes.com/wealth/invest/6-ways-new-classification-of-mutual-fund-schemes-will-impact-the-investor/articleshow/61077843.cms for more information on classification of Mutual fund schemes.