Equirus Wealth
31 Jan 2024 • 4 min read
Investing in the stock market can be a rewarding yet complex endeavor, and the wide array of equity funds available can be overwhelming. To simplify this maze, the Securities and Exchange Board of India (SEBI) has implemented a comprehensive categorization system for mutual funds.
This guide aims to shed light on SEBI's equity fund categorization, enabling investors to navigate the market with confidence and align their investment choices with their financial objectives and risk tolerance.
SEBI has streamlined the classification of mutual funds into five broad categories, each serving a distinct purpose:
Source: Association of Mutual Funds of India
Understanding these broad categories is the first step toward simplifying the investment decision-making.
Within the realm of equity-oriented schemes, SEBI further refines classification based on several key factors, providing investors with a nuanced understanding of their options:
Selecting the most suitable equity fund category involves considering your factors:
By understanding these factors, investors can make informed decisions that resonate with their unique financial situations.
By comprehending the intricacies of each category and aligning them with their investment goals, individuals can make informed choices. It's essential to conduct thorough research, diversify investments, and seek professional guidance to enhance the overall investment journey.
This article provides a basic overview of SEBI's equity fund categorization. For in-depth information on specific categories and individual funds, investors are encouraged to explore SEBI's official website and consult with qualified financial advisors.
In conclusion, the complex world of equity funds becomes more manageable when armed with knowledge. SEBI's categorization system serves as a beacon, guiding investors through the maze of options and helping them make choices that align with their financial aspirations.
With this newfound understanding, investors can confidently approach the market and embark on a journey toward financial success.
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