Tipping Point: Has your fund changed its name recently? Read why

Indiabulls Monthly Income Plan’s name was changed to Indiabulls Savings Income Fund. As Sebi's norms for classification of funds kick in, fund houses will make many changes to their schemes. Some will involve only a change of name, while others may also entail a change of character. While the former is an inconsequential change, the latter may require some action on your part. 

How should you react to this development?

In the above-mentioned case, the fund's character has changed. A monthly income plan is predominantly a debt fund with a small sliver of equity (15-25 per cent) whereas an equity-savings fund has a higher equity component  (around 30-35 per cent). The latter also invests in arbitrage opportunities so that equities and derivatives together make up 65 per cent of the portfolio, qualifying it for tax treatment as an equity fund. Stick to the altered fund only if you are comfortable with the change.