SEBI Revamps Mutual Fund Categories, Introduces Life Cycle Funds and Overlap Limits

The Securities and Exchange Board of India (SEBI) has overhauled mutual fund categorisation rules to enhance clarity, transparency, and investor protection. Key changes include introducing Life Cycle Funds with 5-30 year tenures that gradually reduce equity exposure, discontinuing solution-oriented schemes, and imposing a 50% portfolio overlap limit for sectoral and thematic funds. SEBI mandates uniform scheme naming aligned with categories and allows broader residual investments including gold and silver. Existing schemes must comply within six months, with phased implementation for overlap norms.