All Mutual Fund Categories, Explained the SEBI Way
Forty sub-categories. Four broad groups. One framework that lets you compare apples with apples.
SEBI organizes every mutual fund in India into one of forty named buckets. Same name = same rules = fair comparison. Pick a bucket below to see every fund in it, ranked by 1, 3, 5 and 10-year returns — refreshed daily with live AMFI NAVs.
How SEBI organizes mutual funds
Before October 2017, two funds called "Large Cap" at two different AMCs could hold completely different stocks. One might own the top 50 companies. The other might own anything down to rank 200 and still call itself "large cap." Comparison was guesswork.
SEBI fixed that. The 2017 categorization circular forced every Asset Management Company to slot every scheme into one of a fixed list of categories — each with a strict, regulator-defined portfolio rule. A "Large Cap Fund" must now invest at least 80% of its money in the top 100 companies by market capitalization. Every AMC, every scheme, no exceptions. The same standardization applies to "Mid Cap," "Small Cap," "Liquid," "Gilt," "ELSS" and the rest.
SEBI revised the framework on 26 February 2026 (effective 1 April 2026): the count moved from 36 to 40 sub-categories, Life Cycle Funds and Sectoral Debt Funds were added, and the Solution-Oriented bucket (Children's and Retirement funds) is being sunset — existing schemes stay invested but stop accepting new money. SEBI also tightened "true-to-label" rules, capping portfolio overlap between similar equity schemes at 50% and lifting the minimum equity allocation in equity schemes to 80%.
The list below is the current, post-April-2026 framework. Each card opens the category's listing page where you can sort and compare every fund in that bucket on real returns from real AMFI data.
Why this matters
| Before | After |
|---|---|
| 50 funds called "Diversified Equity" with 50 different rules | 1 rule per category |
| Comparison = guesswork | Comparison = math |
| Names hid the strategy | Name describes the strategy |
Not sure which category fits you? Take 30 seconds to find out.
Answer a few questions and we'll match you to the right fund category.
What changed in April 2026
SEBI's 26 February 2026 circular is the biggest re-categorization since 2017. Three changes you should notice:
- Life Cycle Funds are now their own category — open-ended schemes with a target maturity date (5–30 years) that automatically shift from equity to debt as you near the goal. Up to six per AMC.
- Sectoral Debt Funds are new — at least 80% of the portfolio in debt of a single sector (financial services, energy, infrastructure, housing, real estate).
- Solution-Oriented funds(Children's, Retirement) are being sunset. Existing schemes stay invested; no new money accepted. They will eventually merge into similar hybrid or equity schemes.
Equity Funds
Equity funds invest your money in the shares of listed companies. They are the highest-return, highest-volatility category — historically delivering 10–14% CAGR over 10+ year periods, with annual swings of ±30% on the way. Every equity sub-category below must hold at least 65% in equities; most categories require 80% or more. Equity funds suit investors with a 5+ year horizon who can stomach a portfolio dropping 35% in a bad year. Inside the equity bucket, the eleven sub-categories below differ by company size (large/mid/small), investment style (value/contra/focused), theme (sectoral) or tax treatment (ELSS).
Large Cap
Top 100 companies by market cap. Lowest volatility within equity. ≥80% in large caps.
Large & Mid Cap
Mandatory ≥35% each in top 100 and next 150 companies. Hybrid of stability + growth.
Mid Cap
Companies ranked 101–250. Higher growth, higher swings. ≥65% in mid caps.
Small Cap
Companies ranked 251 and beyond. Highest equity risk, highest equity reward. ≥65% in small caps.
Multi Cap
Mandatory ≥25% each in large, mid, small. Forced diversification.
Flexi Cap
≥65% in equities, but the manager decides the size mix freely.
Focused
Maximum 30 stocks. Conviction bets. Higher single-stock risk.
Value
Buys stocks trading below intrinsic value. Patience required. ≥80% equity.
Contra
Bets against prevailing market sentiment. AMC can offer Value or Contra, not both.
Dividend Yield
≥80% in dividend-paying stocks. Income tilt within equity.
ELSS (Tax Saver)
≥80% equity, 3-year lock-in, ₹1.5L deduction under Section 80C.
Sectoral / Thematic
≥80% in one sector (Pharma, Banking, IT) or theme (Infra, ESG, PSU). 2026 cap: ≤50% overlap with peers.
Run a SIP backtest on the top large-cap fund — see what ₹5K/month became over 20 years.
GoDebt Funds
Debt funds lend your money — to the government, to top-rated corporates, to banks, to PSUs — and pay you back the interest. They sit between bank fixed deposits and equity on the risk ladder: lower returns than equity (typically 5–8% annualized) but materially less volatility. The sixteen sub-categories below differ by how long the fund lends for (overnight to 7+ years, called duration) and who it lends to (government = safest, credit-risk = highest yield with default risk). Debt funds suit emergency-fund parking, short-horizon goals (1–3 years), or as the safety ballast in a hybrid portfolio. Tax: gains taxed at slab rate from April 2023.
Overnight
Lends for 1 day. Lowest debt risk.
Liquid
Lends for up to 91 days. Better than savings account.
Ultra Short Duration
Macaulay duration 3–6 months.
Low Duration
Macaulay duration 6–12 months.
Money Market
Money market instruments up to 1 year maturity.
Short Duration
Macaulay duration 1–3 years.
Medium Duration
Macaulay duration 3–4 years.
Medium to Long Duration
Macaulay duration 4–7 years.
Long Duration
Macaulay duration > 7 years. Most rate-sensitive.
Dynamic Bond
Manager flexes duration with rate cycle.
Corporate Bond
≥80% in AA+ and above corporate bonds.
Credit Risk
≥65% in below-AA corporates. Higher yield, higher default risk.
Banking and PSU
≥80% in bank, PSU, PFI debt.
Gilt
≥80% in government securities. Zero credit risk; full rate risk.
Gilt — 10 Year Constant
Gilt + locked 10-year duration.
Floater
≥65% in floating-rate debt.
Sectoral Debt
≥80% in one sector's debt. Five permitted: Financial Services, Energy, Infrastructure, Housing, Real Estate.
Compare debt fund returns with your bank FD.
GoHybrid Funds
Hybrid funds blend equity and debt in the same scheme. The blend ratio is the whole story — Conservative tilts heavily to debt (75–90%), Aggressive tilts heavily to equity (65–80%), Balanced sits between. Hybrids exist because most investors don't actually want pure equity or pure debt — they want a single fund that auto-rebalances and smooths the ride. They suit first-time investors, anyone with a 3–5 year horizon, or as the core holding in a goal-based plan. The seven sub-categories below cover the full risk spectrum from arbitrage (almost-cash-like) to aggressive (almost-equity-like), plus multi-asset funds that add gold and commodities.
Conservative Hybrid
10–25% equity, 75–90% debt. For income with a small growth tilt.
Balanced Hybrid
40–60% equity, 40–60% debt. Genuine middle ground.
Aggressive Hybrid
65–80% equity, 20–35% debt. Equity returns with a debt cushion.
Dynamic Asset Allocation / BAF
Equity-debt mix flexed by manager based on valuation.
Multi-Asset Allocation
≥10% each in three or more asset classes (equity, debt, gold, REITs).
Arbitrage
≥65% in cash-and-derivative arbitrage. Equity tax treatment, near-debt risk.
Equity Savings
Equity + arbitrage + debt mix. ~30% net equity exposure typical.
See how a 70/30 hybrid would have weathered the 2008 and 2020 crashes.
GoOther / Passive Funds
"Other" is SEBI's catch-all for funds that don't slot neatly into pure equity, debt or hybrid — index funds and ETFs that mechanically track a benchmark, fund-of-funds that invest in other mutual funds, gold and silver ETFs that hold physical metal, international funds that invest abroad, and the brand-new Life Cycle Funds (April 2026) that automatically glide from equity-heavy to debt-heavy as you near a target date. Most "Other" funds are passive, low-cost, and rules-based — useful as portfolio building blocks rather than standalone bets. Expense ratios here are typically 0.05–0.50%, the lowest in the mutual fund universe.
Index Funds
Mirror an index (NIFTY 50, SENSEX, NIFTY Next 50). Expense capped at 1.5%; usually 0.10–0.30%.
ETF
Index funds that trade on the exchange like stocks. Need a demat account.
Fund of Funds (Domestic)
Invests in other Indian mutual funds. Useful for one-click multi-AMC exposure.
Fund of Funds (International)
Feeder funds investing in overseas markets via a foreign parent fund.
Gold ETF / Gold Fund
Holds physical gold. ETF version trades on exchange; fund version doesn't need demat.
Silver ETF / Silver Fund
Holds physical silver. Newer category, fewer schemes.
Life Cycle Funds
Target-maturity, glide-path. Equity-heavy at start, debt-heavy near maturity. 5–30 year tenor, max 6 per AMC.
Compare Index vs Active in the same category — the cost of being active.
GoSolution-Oriented Funds Sunset April 2026
SEBI's 26 February 2026 circular discontinued the Solution-Oriented category. The two sub-types — Children's Funds and Retirement Funds — will continue to manage existing investments but no longer accept new money. Existing schemes will eventually merge into hybrid or equity schemes with similar asset allocation, subject to SEBI approval. If you currently hold one, your investment is unaffected; if you were planning to start one, look at Aggressive Hybrid or Life Cycle Funds for the same goal.
Frequently asked questions
Why does SEBI categorize mutual funds at all?
How many categories are there now, after the April 2026 SEBI changes?
What's the difference between Flexi Cap and Multi Cap?
Is ELSS the only tax-saving mutual fund?
How do I pick the right category as a first-time investor?
Last reviewed: 26 April 2026 · Next review when SEBI re-categorizes