SEBI’s Re Categorisation 2.0: Mutual Fund Schemes to Get New Names for Alignment

India’s mutual fund industry is undergoing another wave of transformation as SEBI directs asset management companies (AMCs) to simplify scheme names. The second phase of scheme categorisation aims to help investors, especially first-timers, understand fund offerings more easily. Leading AMCs have already started implementing the new naming rules.

SEBI 2.0: Easier Names, Clearer Choices in Mutual Fund Investing

On March 31, 2025, SEBI issued an instruction to all fund houses to rename their equity schemes so that the category and risk profile are immediately identifiable. 

SEBI 2.0 marks the second phase of the Securities and Exchange Board of India’s initiative aimed at refining the structure and classification of mutual fund schemes. The key objective is to bring greater clarity and consistency to scheme categorisation and naming, thereby helping investors better understand and compare their investment choices.

Examples of Scheme Name Revisions

Major players such as HDFC Mutual Fund and ICICI Prudential Mutual Fund have already implemented the revised names ahead of the June 30, 2025, deadline. For instance, HDFC Mid Cap Opportunities Fund has become HDFC Mid Cap Fund, while ICICI Prudential Value Discovery Fund is now ICICI Prudential Value Fund. Similarly, DSP’s Equity Opportunities Fund is now DSP Large & Mid Cap Fund.

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Standardising Categories Across the Industry

The recategorisation brings uniformity by aligning fund names directly with their SEBI-defined categories. This means terms like Bluechip, Opportunities, and Discovery, commonly used earlier, are now replaced with Large Cap, Mid Cap, or Value. For example, Axis Bluechip Fund has been renamed Axis Large Cap Fund and Bandhan Sterling Value Fund is now Bandhan Value Fund. This uniform approach is intended to reduce ambiguity and improve fund selection accuracy.

Impact on Investors and Distributors

The initiative is expected to benefit investors by removing jargon and improving awareness of a scheme’s core strategy. Financial advisors and mutual fund distributors will also find it easier to recommend schemes as naming becomes self-explanatory. However, these changes are only cosmetic. The scheme’s investment style and holdings remain the same unless stated otherwise by the fund house.

Conclusion

SEBI’s scheme recategorization 2.0 brings greater standardisation to mutual fund scheme names. By June 30, 2025, all fund houses are expected to align their schemes with the updated norms. While the investment strategies remain unchanged, the simplified scheme names will likely improve investor awareness and decision making across the mutual fund landscape.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all the related documents carefully before investing.