L&T Financial Services has proposed re-categorization of mutual funds to The Securities and Exchange Board of India (SEBI) for various schemes. The changes have come into place due to a recent circular by the regulator, SEBI, to rationalize the existing mutual fund schemes.

The reason for this rationalization is to simplify the investing and decision-making process for common investors.
SEBI proposed Categorization and Rationalization of All Mutual Fund Schemes, which all fund houses must adhere to.

Changes in the Scheme Names of L&T Mutual Fund

Old Name New Name Old Category New Category
L&T Arbitrage Opportunities Fund L&T Arbitrage Opportunities Fund Equity-Arbitrage Hybrid-Arbitrage
L&T Banking & PSU Debt Fund L&T Banking & PSU Debt Fund Debt-Ultra Short Term Debt-Banking & PSU
L&T Business Cycles Fund L&T Business Cycles Fund Equity-Diversified Equity-Sectoral/Thematic
L&T Cash Fund L&T Cash Fund Liquid-Liquid Debt-Overnight
L&T Dynamic Equity Fund L&T Dynamic Equity Fund Dynamic/Asset Allocation-Dynamic/Asset Allocation Hybrid-Dynamic Asset Allocation
L&T Emerging Businesses Fund L&T Emerging Businesses Fund Equity-Diversified Equity-Small Cap
L&T Equity Fund L&T Equity Fund Equity-Diversified Equity-Multi Cap
L&T Equity Savings Fund L&T Equity Savings Fund Hybrid-Debt Oriented Hybrid-Equity Savings
L&T Flexi Bond Fund L&T Flexi Bond Fund Debt-Income Debt-Dynamic
L&T Floating Rate Fund L&T Money Market Fund Debt-Floating Rate Fund Debt-Money Market
L&T Gilt Plan Investment L&T Gilt Fund Debt-Gilt Debt-Gilt
L&T Income Opportunities Fund L&T Credit Risk Fund Liquid-Liquid Debt-Overnight
L&T Income Opportunities Fund L&T Credit Risk Fund Debt-Income Debt-Credit Risk
L&T India Large Cap Fund L&T India Large Cap Fund Equity-Diversified Equity-Large Cap
L&T India Special Situations Fund L&T Large and Midcap Fund Equity-Diversified Equity-Large & Mid Cap
L&T India Value Fund L&T India Value Fund Equity-Diversified Equity-Value
L&T Infrastructure Fund L&T Infrastructure Fund Equity-Sector Equity-Sectoral/Thematic
L&T Liquid Fund L&T Liquid Fund Liquid-Liquid Debt-Liquid
L&T Midcap Fund L&T Midcap Fund Equity-Diversified Equity-Mid Cap
L&T Monthly Income Plan L&T Conservative Hybrid Fund Debt-MIP Hybrid-Conservative
L&T Resurgent India Corporate Bond Fund L&T Resurgent India Bond Fund Debt-Income Debt-Medium Duration
L&T Short Term Income Fund L&T Low Duration Fund Debt-Short Term Debt-Low Duration
L&T Short Term Opportunities Fund L&T Short Term Bond Fund Debt-Short Term Debt-Short Duration
L&T Tax Advantage Fund L&T Tax Advantage Fund Equity-Tax Planning Equity-ELSS
L&T Taxsaver Fund Merged with L&T Tax Advantage Fund Equity-Tax – ELSS Equity-ELSS
L&T Triple Ace Bond Fund L&T Triple Ace Bond Fund Debt-Income Debt-Corporate Bond
L&T Ultra Short Term Fund L&T Ultra Short Term Fund Debt-Ultra Short Term Debt-Ultra Short Duration

All unitholders of relevant schemes shall be notified about the change in name, category or any other changes in the fund, whatsoever.

What Will Be the Impact on Investors?

From the perspective of a common retail investor, the new categorization and rationalization process will increase transparency in the investing process. It will empower investors by eliminating confusion in the identification of the mutual fund categories as well.

Moreover, it is expected that the new measure will simplify decision making and selection of funds for all investors.

Here Are Few Characteristics that Might Develop After Recategorization:

  1. Schemes might merge or combine with each other
  2. Your expense ratio might come down because of higher AUM per scheme
  3. The number of schemes will reduce

What is category change?

Mutual fund category explains where and in what proportion the fund will invest in assets under management (AUM) and in what proportion. Therefore, in the process of rationalization, if there is a change in category of mutual funds, an investor must keep track of the change.

This will enable him/ her to change the strategy of investment in these mutual funds, if required. It is recommended to contact the advisor if one faces any issue or doubt over any of the re-assessed categories of funds.

Know More: New Mutual Fund Rules by SEBI: Categorization and Rationalization Of Mutual Fund Schemes

What Is the Reason for Re-Categorization?

Securities Exchange Board of India (SEBI) recently came up with a circular instructing re-categorization and rationalization of all mutual funds schemes. Basically, SEBI wants to reduce confusion for investors and simplify the decision-making process, around selection and identification of mutual funds.

As per the new circular, one mutual fund company can have only one scheme under each category. Thus, all Mutual Fund Houses are renaming, re-categorizing, and merging mutual funds as per the directives of SEBI. In abidance with the circular, L&T Mutual Fund has also re-categorized its mutual fund schemes.

Read More: The 30 Best Mutual Funds to Invest in 2018 – Groww 30.

Happy investing!

Disclaimer: The views expressed here are that of the author and do not reflect those of Groww. 

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