What is SEBI's mutual fund scheme categorisation?
Key facts
- Categorisation standardises fund types so investors can compare similar schemes fairly.
- Schemes are grouped into broad families, then defined sub-categories.
- A fund house generally offers only one scheme per category, to avoid duplication.
- The framework was introduced in 2017 and revised by SEBI on 26 February 2026.
Why categories exist
Before 2017, fund houses named schemes however they liked, and comparing them was a mess. SEBI's categorisation fixed that by defining standard categories, so that a large-cap fund from one house sits in the same defined box as a large-cap fund from another. It also limited each fund house to broadly one scheme per category, which cut down on confusing, near-identical products.
The result is simple and useful: you can compare like with like.
How it is organised
Schemes are sorted into broad families, equity, debt, hybrid and others, and each family is split into defined sub-categories with rules about what they must hold. That structure is what makes a category label meaningful.
The framework was introduced in 2017 and revised by SEBI on 26 February 2026, which updated the categories and added new fund types.
Please verify: the current list of categories, the number in each family, and the specific 2026 changes, such as new categories and any being sunset, should be confirmed against the SEBI circular before you rely on exact figures.
What a category does and does not tell you
A category tells you a fund's mandate, what it is allowed to invest in. It does not tell you how the fund will perform, and two funds in the same category can differ widely. Use categorisation to shortlist comparable funds, then look at cost, mandate fit and the riskometer. If you want help navigating the categories, talk to us.
Frequently asked questions
Why did SEBI standardise fund categories?
Before 2017, fund houses used inconsistent names, making it hard to compare schemes. SEBI defined standard categories so that, for example, one large-cap fund can be compared with another. It also limited fund houses to broadly one scheme per category, reducing confusing duplication.
What changed in the 2026 revision?
SEBI revised the framework on 26 February 2026, updating the list of categories and adding new fund types. The exact changes, including new categories and any that are being sunset, should be read from the current SEBI circular, as this page is a general overview.
Does the category tell me how a fund will perform?
No. A category describes what a fund is allowed to invest in, its mandate, not how it will do. Two funds in the same category can perform very differently. Use the category to compare like with like, then look deeper.
This is general information, not a recommendation for your situation. If it would help to talk it through, we are happy to. Talk to Nico Wealth.
The information on this website is general and educational. It is not financial, tax, or legal advice, and not a recommendation for your situation. We try to keep it accurate and up to date, but it may contain errors or become outdated. Please verify important details from official sources, and consider your own circumstances, before acting.
Sources
- SEBI circular on categorisation and rationalisation of mutual fund schemes (2017)
- SEBI circular revising categorisation (26 February 2026)
Last verified:
Have a question about this?
If you would like to talk it through with a real person, Nico Wealth is here. No obligation.
Talk to Nico Wealth