Investor Corner/The asset classes

2.4 Mutual Fund Categories

The regulator-defined categories equity, debt and hybrid funds fall into, and what each one is actually allowed to invest in, so a fund's name tells you something real about its risk. SEBI’s fund categorisation rules mean a scheme’s name, Large Cap, Flexi Cap, Corporate Bond, is not just marketing; it constrains what the fund is legally allowed to hold. Knowing the category rules makes it possible to compare funds on equal terms instead of by brand or past returns alone.