The equity mutual fund comprises of so many categories but as per SEBI norms, only 10 of these are considered. These are:
Multi-Cap Funds: This category can invest across sectors and market capitalisation just like Large cap, Mid Cap and so on in the trend.
Large Cap Funds: These schemes have to invest at least 80 per cent of the scheme money in the top 100 companies by market capitalisation or large-cap companies.
Mid Cap Funds: Under these schemes, at least 65 per cent of their assets must invest in mid-cap companies stock. These are referred to the companies that rank between 101 and 250 according to their market capitalisation.
Large & Midcap Funds: These funds are bound to invest at least 35 per cent of their assets in large and 35 per cent in mid-cap stocks.
Small-Cap Funds: This scheme has to invest at least 65 per cent of their assets in small-cap companies stocks, defined by market capitalisation ranking of less than 251.
Dividend Yield Fund: Under these schemes, a minimum of 65 per cent needs to be invested in dividend-yielding stocks.
Value Funds: This scheme goes for a mandatory investment of at least 65 per cent if their assets in stocks based on value investing principles.
Contra Funds: These funds works on contrarian investment strategy and must invest 65 per cent of their assets on stocks based on this strategy only.
Focused Funds: Focused funds invest in a portfolio consisting of a maximum of 30 stocks. Most of the focused funds generally follow a mid-cap strategy.
Thematic or Sectoral Funds: As the name suggests, this fund invests their 80 per cent assets in a dedicated theme or sector.
ELSS Funds: Equity Linked Saving Schemes also known as tax saving mutual funds have a mandatory 3 years lock-in-period. Investments in these schemes can exempt you from tax deductions up to Rs 1.5 lakh under section 80C.