Mutual fund reclassification rules: 6 years in, rolling with the best

Even as Sebi's classification norms for MF schemes approach six years of completion, we examine the three-year rolling returns of schemes in the top categories to identify the best performers

October 2017 marked the inception of a new era for the mutual fund (MF) industry. The reclassification norms introduced by the Securities and Exchange Board of India came into effect, prompting the industry to revamp its product portfolio.

The market regulator formulated 36 different scheme categories with clearly defined boundaries, mostly revolving around asset quality, market capitalisation, and asset allocation. The objective was to aid investors in identifying schemes better suited to their needs and risk profiles.

This exercise also helped narrow down the various options within each category and put an end to the practice of launching copycat schemes