SEBI has told mutual funds to reduce the number of funds under management stay on to only one fund per category in an attempt to end the complications of mutual fund investing.
According to ‘The Economic Times’, regulator believes current products list, longer is confusing investors.
SEBI feels that an excess of schemes makes it impossible for an investor to gauge a fund's suitability and often the distinctions are too thin.
Some schemes under the debt category has to be brought down to 8 and 7 for equities, regulator told industry representatives earlier this week.
SEBI wants every fund to have one scheme under every category.
This could include liquid plus, liquid, short term, ultra short term, income, gilt, monthly income plan, and credit fund for investors in fixed income plans. For equity, the definition should be large cap, mid cap, micro-cap, ELSS, balance fund, arbitrage fund, and concentrated fund.