Glossary· Ratings & classification
What is Category & sub-category?
SEBI's scheme classification — what the fund is allowed to hold.
Since 2018 every open-ended scheme must sit in exactly one defined sub-category (Large Cap, Mid Cap, Flexi Cap, Corporate Bond, and so on) with binding holding rules. It is the only sound basis for comparing two funds — everything on this site ranks within sub-category, never across.
For the formula and the constants behind this figure, see Methodology.
Guides that use Category & sub-category
10 guides put this term to work.
- Equity funds demystified: large cap, mid cap, small cap and the SEBI rulebookSince 2017 every open-ended scheme sits in one defined box with a binding rule about what it must hold. What the boxes mean, and why comparing across them tells you almost nothing.
- Flexi cap vs multi cap: which strategy offers better flexibility?One is obliged to hold small caps; the other is free not to. The 2020 rule change that created the split, and why it affects how you read an older track record.
- Debt funds explained: duration risk and credit risk are not the same thingSixteen SEBI categories along two independent axes. Why a gilt fund can have a worse year than an equity fund, and what the 2023 tax change actually removed.
- Sectoral and thematic funds: high risk, high reward — or just hype?The launch cycle is a coincident indicator of the peak, not a signal. Why concentration is the product, and the conditions under which one is defensible.
- Mutual fund overlap: are you really diversified?Diversification stops early and overlap starts immediately. Why the answer is four to six, how to measure the duplication you already own, and how to unwind it without a tax bill.
- Credit risk and yield-to-maturity in debt fundsA high YTM is a description of the risk taken, not a forecast of the return earned. How to read it beside the rating profile, and what a credit event permanently does.
- Infrastructure and PSU funds: riding the government capex cycleA leveraged bet on capex and policy, with a specific trap: cyclicals look cheapest exactly when earnings have peaked, which is also when the schemes get launched.
- Banking and financial services funds: doubling a bet you already holdFinancials are already the largest sector in every diversified portfolio. Lending books their revenue years before they discover its cost — which is what makes the cycle so dangerous.
- How SEBI's rules actually protect a retail investorThe structural protections, the conduct rules and the safety nets — and the more useful half: an explicit list of what none of it protects you from.
- Thirty years back, thirty years ahead: how Indian funds evolvedNearly every protection you rely on exists because something failed. Which incident produced which rule, and what is likely, uncertain and unlikely next.
More on ratings & classification
How funds are grouped and scored here.
- Star rating
- Our own 1–5 stars: 60% performance, 15% risk, 10% cost, 15% downside.
- Peer group
- The funds a rating or rank is measured against — same sub-category, plan and option.