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SEBI Fund Categories Explained
Every mutual fund in India falls into one of these SEBI-defined categories. Understanding them is the first step to picking the right fund.
Equity Funds
Equity funds invest primarily in stocks. SEBI defines strict rules about which stocks each category can hold — this prevents fund managers from style-drifting.
| Category | SEBI Rule | Benchmark | Risk |
|---|---|---|---|
| Large Cap | Min 80% in top 100 companies by market cap | Nifty 50 TRI | Moderate |
| Mid Cap | Min 65% in 101st–250th companies | Nifty Midcap 150 TRI | High |
| Small Cap | Min 65% in 251st+ companies | Nifty Smallcap 250 TRI | Very High |
| Large & Mid Cap | Min 35% each in large AND mid cap | Nifty 50 TRI | Moderately High |
| Flexi Cap | Min 65% equity, anywhere across large/mid/small | Nifty 500 TRI | High |
| Multi Cap | Min 25% each in large, mid AND small cap | Nifty 500 TRI | High |
| ELSS | Min 80% equity, 3-year lock-in, Section 80C tax benefit | Nifty 500 TRI | High |
Category definitions sourced from SEBI Circular on Categorization and Rationalization of Mutual Fund Schemes (October 2017). For informational purposes only — not financial advice.