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 NameNew NameOld CategoryNew Category
L&T Arbitrage Opportunities FundL&T Arbitrage Opportunities FundEquity-ArbitrageHybrid-Arbitrage
L&T Banking & PSU Debt FundL&T Banking & PSU Debt FundDebt-Ultra Short TermDebt-Banking & PSU
L&T Business Cycles FundL&T Business Cycles FundEquity-DiversifiedEquity-Sectoral/Thematic
L&T Cash FundL&T Cash FundLiquid-LiquidDebt-Overnight
L&T Dynamic Equity FundL&T Dynamic Equity FundDynamic/Asset Allocation-Dynamic/Asset AllocationHybrid-Dynamic Asset Allocation
L&T Emerging Businesses FundL&T Emerging Businesses FundEquity-DiversifiedEquity-Small Cap
L&T Equity FundL&T Equity FundEquity-DiversifiedEquity-Multi Cap
L&T Equity Savings FundL&T Equity Savings FundHybrid-Debt OrientedHybrid-Equity Savings
L&T Flexi Bond FundL&T Flexi Bond FundDebt-IncomeDebt-Dynamic
L&T Floating Rate FundL&T Money Market FundDebt-Floating Rate FundDebt-Money Market
L&T Gilt Plan InvestmentL&T Gilt FundDebt-GiltDebt-Gilt
L&T Income Opportunities FundL&T Credit Risk FundLiquid-LiquidDebt-Overnight
L&T Income Opportunities FundL&T Credit Risk FundDebt-IncomeDebt-Credit Risk
L&T India Large Cap FundL&T India Large Cap FundEquity-DiversifiedEquity-Large Cap
L&T India Special Situations FundL&T Large and Midcap FundEquity-DiversifiedEquity-Large & Mid Cap
L&T India Value FundL&T India Value FundEquity-DiversifiedEquity-Value
L&T Infrastructure FundL&T Infrastructure FundEquity-SectorEquity-Sectoral/Thematic
L&T Liquid FundL&T Liquid FundLiquid-LiquidDebt-Liquid
L&T Midcap FundL&T Midcap FundEquity-DiversifiedEquity-Mid Cap
L&T Monthly Income PlanL&T Conservative Hybrid FundDebt-MIPHybrid-Conservative
L&T Resurgent India Corporate Bond FundL&T Resurgent India Bond FundDebt-IncomeDebt-Medium Duration
L&T Short Term Income FundL&T Low Duration FundDebt-Short TermDebt-Low Duration
L&T Short Term Opportunities FundL&T Short Term Bond FundDebt-Short TermDebt-Short Duration
L&T Tax Advantage FundL&T Tax Advantage FundEquity-Tax PlanningEquity-ELSS
L&T Taxsaver FundMerged with L&T Tax Advantage FundEquity-Tax – ELSSEquity-ELSS
L&T Triple Ace Bond FundL&T Triple Ace Bond FundDebt-IncomeDebt-Corporate Bond
L&T Ultra Short Term FundL&T Ultra Short Term FundDebt-Ultra Short TermDebt-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:

  1. Some schemes might get merged with others
  2. Your expense ratio might come down because of higher AUM per scheme
  3. 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 the 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 the 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.

To see the best mutual funds to invest from every category:
The 30 Best Mutual Funds to Invest in 2018 – Groww 30.

Happy investing!

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