Mutual Fund Categories in India

So that funds of the same kind follow the same rules at every fund house, the company that runs them. A mutual fund is a pool of money from many people, invested by a professional manager under the rules of SEBI, the market regulator. A category is SEBI's label for what a fund may hold. Any large cap fund, for example, must keep at least 80% in the 100 biggest companies.

The name has to match too: "the scheme name shall be the same as the scheme category". The rules in force took effect on 26 February 2026 and sit in SEBI's master circular of 20 March 2026. Existing schemes had until 26 August 2026 to take the new names. The ELSS category, for example, is now ELSS – Tax Saver Fund.

Nor can a fund quietly become a different kind of fund. The fund house must write to every investor before changing what it invests in. You get at least 30 days to leave at that day's NAV (unit price), with no exit load, a fee for selling early.

SEBI's tables list 40 categories in five groups:

• Equity: funds that mainly buy equity, meaning company shares.
• Debt: funds that mainly lend to governments, banks and companies through bonds and similar paper.
• Hybrid: a mix, such as shares and bonds, and some add gold or silver.
• Life cycle: funds that follow a set path towards a target year.
• Other: index funds, which copy an index (a list picked by fixed rules), and funds of funds, which invest in other funds.

SEBI describes each as open-ended: the fund has no end date, so you can put money in or take it out when you choose. ELSS is the exception, with a three-year lock-in, a period when you cannot sell.

Most of the 38 match one SEBI category each. They sit under four asset-class pages: equity funds, debt funds, hybrid funds and commodity funds.

Three pages join two SEBI categories:

• Value and contra funds: both keep at least 80% in equity. A fund house may run both if their holdings overlap by 50% or less.
• Sectoral and thematic funds: both keep at least 80% in one sector or theme.
• Gilt funds: both gilt categories keep at least 80% in government securities.

Some pages come from SEBI's "other" group. Index and international funds sit under equity. Target maturity funds sit under debt: they are bond index funds or ETFs, which trade on an exchange. SEBI has no commodity group: gold and silver funds are ETFs or funds of funds.

Categories whose suggested horizon fits inside the time before you need the money. Koshex suggests:

• Days to a few months: overnight and liquid funds.
• Up to a year: money market, ultra short duration and low duration. Arbitrage: 3 months to 1 year or more.
• 1 to 3 years: short duration and floater. Corporate bond, banking and PSU: 1 to 3 years or more. Conservative hybrid: 2 to 3 years.
• About 3 to 5 years: balanced hybrid and dynamic asset allocation. Dynamic bond, credit risk, equity savings: 3 years or more. Medium duration: 3 to 4 years or more. Medium to long duration: 4 years or more.
• 5 years or more: large cap, flexi cap, focused, dividend yield, aggressive hybrid, multi asset allocation, gold, silver and gilt. Constant maturity gilt: 10 years. Large and mid cap, value and contra: 5 to 7 years.
• 7 years or more: mid cap, small cap, multi cap, sectoral and thematic, international and long duration.

ELSS funds lock each purchase for 3 years, and we suggest 5 years or more. We suggest a target maturity fund for money you can leave until its maturity date.

Say you plan to open a small shop in about four years. That rules out every category in the last two lines, and ELSS.

Koshex, an AMFI-registered distributor (ARN-154632), helps you buy and manage funds, and can help you choose one that suits your goal and timeline.

The riskometer shows how risky a fund's holdings are now, so you can set aside categories riskier than you can accept. It is the label SEBI makes every fund show, on six levels: Low, Low to Moderate, Moderate, Moderately High, High and Very High. Low is the bottom level, not a promise of no loss.

SEBI's formula scores the holdings. Shares count by company size, price swings and ease of trading. Bonds count by the borrower's chance of not paying, their sensitivity to interest rates and how easily they sell. The level is rechecked every month.

On 29 September 2026, nearly every listed equity fund read Very High. Listed debt funds ran from Low to High. Hybrid funds covered the whole scale, from Low for most arbitrage funds to Very High for most aggressive hybrid funds. So hybrid does not mean medium risk. Most gold funds read High, and every listed silver fund Very High.

For the shop, the 3-to-5-year categories still run from Moderate, for most equity savings funds, to Very High, for most dynamic asset allocation funds. How large a fall you could sit through helps decide which end fits.

Beside the riskometer sits SEBI's product label: "This product is suitable for investors who are seeking". It gives the fund's purpose and a rough horizon such as "long term". Both sit on the first page of the application form and scheme documents. Koshex keeps reviewing your holdings and flags changes in a fund's level or category.

Because the Income-tax Act, 2025 sorts funds by what they held over the year. Your holding period, how long you have owned a unit, decides whether a gain is short-term or long-term. Your slab rate is your normal income-tax rate.

The ₹1,25,000 is one allowance for you per tax year, across all your qualifying equity funds and listed shares.

A hybrid fund's row depends on its actual holdings.

Add 4% cess, an extra charge on the tax. A surcharge, a further charge on the tax, applies only above ₹50 lakh of income. IDCW, a payout that lowers the NAV, counts as income at your slab rate. A fund house deducts 10% TDS (tax taken before the money reaches you) once your IDCW from it passes ₹10,000 in a tax year. Redemption gains of a resident carry none.

ELSS gives a deduction of up to ₹1,50,000 a year under section 123 (the old Section 80C), old tax regime only. Other section 123 items share that limit.

How a category's funds did over the last three years. Each card shows their average 3-year CAGR, the average yearly growth rate over the period. It is a simple average over funds with a full 3-year record.

Every figure uses the regular plan, bought through a distributor such as Koshex, and the growth option. Growth pays nothing out, so its NAV carries the whole return.

A liquid fund's three years of short-term lending and a small cap fund's three years of shares measure different things. So compare funds inside one category, on its own page. These are past figures, not a forecast.