As per the SEBI circular, open-end hybrid mutual fund schemes have been categorized under the following subheads:
Open Ended Hybrid Schemes
Conservative Hybrid Fund: An open-ended hybrid scheme investing predominantly in debt instruments. Investment in debt instruments shall be between 75 percent and 90 percent of total assets while investing in equity and equity instruments shall be between 10 percent and percent of total assets.
Balanced Hybrid Fund: An open-ended balanced scheme investing in equity and debt instruments. The investment in equity and equity-related instruments shall be between 40 percent and 60 percent of total assets while investment in debt instruments shall be between 40 percent and 60 percent. No arbitrage is permitted in this scheme. In India, AMC’s offering Balanced Hybrid Funds are not permitted to offer Aggressive Hybrid Funds.
Aggressive Hybrid Fund: An open-ended hybrid scheme investing predominantly in equity and equity-related instruments. Investment in equity and equity-related instruments shall be between 65 percent and 80 percent of total assets while investment in debt instruments shall be between 20 percent and 35 percent of total assets. In India, AMC’s offering Aggressive Hybrid Fund is not permitted to offer Balanced Hybrid Fund.
Dynamic Asset Allocation or Balanced Advantage: It is an open-ended dynamic asset allocation fund with investment in equity/debt that is managed dynamically.
Multi-Asset Allocation: An open-ended scheme investing in at least three asset classes with a minimum allocation of at least 10 percent each in all three asset classes. Foreign securities are not treated as a separate asset class in this kind of scheme.
Arbitrage Fund: An open-ended scheme investing in arbitrage opportunities. The minimum investment in equity and equity-related instruments shall be 65 percent of total assets.
Equity Savings: An open-ended scheme investing in equity, arbitrage, and debt. The minimum investment in equity and equity-related instruments shall be 65 percent of total assets and the minimum investment in a debt shall be 10 percent of total assets. The minimum hedged & unhedged investment needs to be stated in the SID. Asset Allocation under defensive considerations may also be stated in the Offer Document.