L&T Financial Services has proposed changes and categorization to Securities and Exchange Board of India (SEBI) for various schemes of L&T Mutual Fund.
The said changes have come in the wake of a recent circular by regulator SEBI, directing mutual fund houses to rationalize their existing mutual fund schemes.
The reason for this rationalization process is to simplify the investing process and decision making for common investors, SEBI proposed categorization and rationalization of all mutual fund schemes.
The SEBI requires all mutual fund houses to change the names of their schemes and categorize them according to certain guidelines mentioned in the circular dated October 6, 2017, and December 4, 2017.
Changes in Categories
The table given below contains changes in the scheme names of various mutual fund schemes offered by 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 change in the fund whatsoever.
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 shall empower investors by eliminating confusion in the identification of the category of a particular mutual fund.
Moreover, it is expected that the new measure will simplify decision making and selection of funds for all investors. It is a welcome move in the interest of all investor community.
Here are few things that might happen are:
- Some schemes might get merged with others
- Your expense ratio might come down because of higher AUM per scheme
- The number of schemes might reduce
What is Category Change?
Mutual fund category defines where the mutual fund will invest its Assets under Management and in what proportion.
Therefore, in the process of rationalization, if there is a change in category of the mutual fund, an investor should keep track of the change. This will enable him/ her to also change the strategy of investment in these mutual funds, if required.
It is advisable to contact the advisor if one faces any issue, doubt over whether the investment needs to be re-assessed due to any change in the name or category of the fund.
Reasons for Change
SEBI recently came up with a circular requiring categorization and rationalization of all mutual funds schemes.
Basically, SEBI wants to reduce confusion for investors and simply decision making around selection and identification of mutual fund schemes.
So, as per 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 were given by the Securities Exchange Board of India.
In abidance with the circular L&T Mutual Fund has also re-categorized its mutual fund schemes.
About L&T Mutual Fund
L & T (Larsen & Toubro) mutual fund was launched in the year 2010. It is one of the biggest mutual fund houses in India providing a variety of mutual fund schemes to the investors. L&T Investment Management Limited is the parent company of L&T mutual funds.
Apart from mutual funds, L&T operates in the finance, machinery and industrial products, Information Technology, Construction and Engineering and Real estate sectors.
Read More: Top 10 Mutual Fund Houses in India
To see the best mutual funds to invest from every category:
The 30 Best Mutual Funds to Invest in 2018 – Groww 30.
Disclaimer: the views expressed here are of the author and do not reflect those of Groww.