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TMI BlogCategorization and Rationalization of Mutual Fund SchemesX X X X Extracts X X X X X X X X Extracts X X X X ..... Scheme Characteristics and Type of Scheme (Uniform Description of Schemes): 3. The Schemes would be broadly classified in the following groups: a. Equity Schemes b. Debt Schemes c. Hybrid Schemes d. Solution Oriented Schemes e. Other Schemes The details of the scheme categories under each of the aforesaid groups along with their characteristics and uniform description are given in the Annexure. 4. As per the annexure, the existing type of scheme (presently mentioned below the scheme name in the offer documents/ advertisements/ marketing material/etc) would be replaced with the type of scheme (given in the third column of the tables in the Annexure) as applicable to each category of scheme. This will enhance the existing disclosure. Hence, for the purpose of alignment of the existing schemes with the provisions of this circular, change in type of scheme alone, would not be considered as a change in fundamental attribute. 5. In case of Solution oriented schemes, there will be specified period of lock in as stated in the Annexure. However, the said lock- in period would not be applicable to any existing investment by an investor, registered SIPs an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The aforesaid proposals of the Mutual Funds would also include the proposed course of action (viz., winding up, merger, fundamental attribute change etc.) in respect of the existing similar schemes as well as those that are not in alignment to the categories stated herein. d. Subsequent to the observations issued by SEBI on the proposals, Mutual Funds would have to carry out the necessary changes in all respects within a maximum period of 3 months from the date of such observation. e. Where there is a merger of schemes/change of fundamental attribute(s) of a scheme (as laid down under SEBI Circular No. IIMARP/MF/CIR/01/294/98 dated February 4, 1998), the AMCs would be required to comply with Regulation 18 (15A) of SEBI (Mutual Funds Regulation, 1996). f. Mutual Funds are advised to strictly adhere to the scheme characteristics stated herein as well as to the spirit of this circular. Mutual Funds must ensure that the schemes so devised should not result in duplication/minor modifications of other schemes offered by them. The decision of SEBI in this regard shall be binding on all the mutual funds. IV. Applicability of this circular: a. All existing open ended sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Small Cap Fund- An open ended equity scheme predominantly investing in small cap stocks 6 Dividend Yield Fund Scheme should predominantly invest in dividend yielding stocks. Minimum investment in equity- 65% of total assets An open ended equity scheme predominantly investing in dividend yielding stocks 7 Value Fund* Scheme should follow a value investment strategy. Minimum investment in equity equity related instruments - 65% of total assets An open ended equity scheme following a value investment strategy Contra Fund* Scheme should follow a contrarian investment strategy. Minimum investment in equity equity related instruments - 65% of total assets An open ended equity scheme following contrarian investment strategy 8 Focused Fund A scheme focused on the number of stocks (maximum 30) Minimum investment in equity equity related instruments - 65% of total assets An open ende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 year An open ended debt scheme investing in money market instruments 6 Short Duration Fund Investment in Debt Money Market instruments such that the Macaulay duration of the portfolio is between 1 year 3 years An open ended short term debt scheme investing in instruments with Macaulay duration between 1 year and 3 years (please refer to page no.__)# 7 Medium Duration Fund Investment in Debt Money Market instruments such that the Macaulay duration of the portfolio is between 3 years 4 years An open ended medium term debt scheme investing in instruments with Macaulay duration between 3 years and 4 years (please refer to page no.__)# 8 Medium to Long Duration Fund Investment in Debt Money Market instruments such that the Macaulay duration of the portfolio is between 4 7 years An open ended medium term debt scheme investing in instruments with Macaulay duration b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icability of Net Asset Value in respect of Liquid Fund and Overnight Fund. $ All provisions mentioned in SEBI circular SEBI/IMD/CIR No.13/150975/09 dated January 19, 2009 in respect of liquid schemes shall be applicable # Please refer to the page number of the Offer Document on which the concept of Macaulay s Duration has been explained ^ Words/ phrases that highlight/ emphasize only the return aspect of the scheme shall not be used in the name of the scheme (for instance Credit Opportunities Fund, High Yield Fund, Credit Advantage etc.) C. Hybrid Schemes Sr. No. Category of Schemes Scheme Characteristics Type of scheme (uniform description of scheme) 1 Conservative Hybrid Fund Investment in equity equity related instruments- between 10% and 25% of total assets; Investment in Debt instruments- between 75% and 90% of total assets An open ended hybrid scheme investing predominantly in debt instruments ..... 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