What Is the capital Markets :-

Capital markets are financial markets that bring buyers and sellers together to trade stocks, bonds,
currencies, and other financial assets. Capital markets include the stock market and the bond market.
They help people with ideas become entrepreneurs and help small businesses grow into big companies.

What is a capital market, and examples? A capital market is where individuals and firms borrow funds
using shares, bonds, debentures, debt instruments, etc. The most common example is a stock
exchange such as NASDAQ, trading shares from different companies amongst investors.

Sensex and Nifty:-

The major difference between Sensex and Nifty is the number of constituents they have. While Nifty 50
constitutes of the top 50 companies that are actively traded in NSE, Sensex comprises the top 30
companies actively traded in BSE. Sensex is more niche and on the other hand, Nifty is broader as it has
50 firms.

Earlier, the Sensex was calculated using the weighted market capitalization method. However,
since September 1st, 2003, the BSE Sensex value is calculated using the Free Float Market
Capitalization method. Here are the key steps involved in its calculation:

 As a first step of the free-float market capitalization method, a selection is made of 30 companies
that form the index. The formula for the same is:
 FreeFloat Market Capitalization = Market Capitalization * FreeFloat Factor.
 In this calculation, the market capitalization stands for the market value of the company. It is
calculated as:
 Market capitalization = Share price per share * number of shares issued by the company
 The free Float factor is the percentage representing total shares issued by a company and that is
readily available to trade for the common public. This is also a representation of the total
outstanding shares of a company. Shares that are issued to the promoters, the government, etc.
which are not available for public trading on the market are not included in this factor. 
 After determining the free-float market capitalization, the value of BSE Sensex is calculated using
the below formula:
 Value of Sensex = (Total free float market capitalization/ Base market capitalization) * Base
period index value.
 The base period (year) used here is 1978-79 and the base value is 100 index points.

How to trade on BSE Sensex?

For investors who wish to trade (buy or sell securities) on BSE Sensex, it is important to have a
Demat and a trading account. A Demat account holds the shares in dematerialized or electronic
form. It is similar to a bank account, in that the securities get debited or credited depending on the
transaction. 

A trading account facilitates the sale and purchase transactions of securities online. Investors
must register with a registered broker or brokerage platform, as direct purchase/sale of securities
from the stock exchange is not permitted. Brokers act as financial intermediaries who connect
the stock exchange and the traders.

Apart from a trading and Demat account, an investor must also have a bank account and PAN
card for trading on BSE Sensex. 

Conclusion
With multiple listed companies in India, it can be very difficult for investors to track every available
stock before investing. This is when a market index plays an important role in representing the
entire market. Every investor must know the basics of Sensex since it is a key indicator of market
behavior. 
The Latest on Sensex
The S&P BSE Sensex breached the 60000 points mark on 24 Sep 2021. The jump from 50000 to
60000 happened in just 8 months. 

How have mutual funds been classified?

SEBI has classified mutual fund schemes in the following categories:
1. Equity Schemes (10 categories)
2. Debt schemes (16 categories)
3. Hybrid Schemes (6 categories)
4. Solution Oriented Schemes (2 categories)
5. Other Schemes (2 categories)
Equity schemes
As per SEBI, equity schemes have been further classified into 10 categories, the features of which, along with
the uniform scheme description have been given below:

Category of Schemes Scheme Attributes Uniform Description of the Scheme

Large Cap Fund Should invest 80% of total assets in equity and its related securities of large cap firms
An open-ended equity scheme that majorly invests in large cap stocks
Top large cap funds
1-Mirae Asset Large Cap Fund - Regular Plan
2-Axis Bluechip Fund Axis Bluechip Fund
3-Canara Robeco Bluechip Equity Fund
4-BNP Paribas large cap
5-Edelweiss Large cap
Mid Cap Fund Should invest 65% of total assets in equity and its related securities of mid cap firms An open-
ended equity scheme that majorly invest in mid cap stocks.eg:-
1- Axis midcap fund-Regular growth
2- Invesco india mid cap fund
3- Kotek equity emerging fund
4- DSP mid cap fund
5- Kotek equity opportunity fund
Small Cap Fund Should invest 65% of total assets in equity and its related securities of small cap firms
An open-ended equity scheme that majorly invests in small cap stocks eg’-
1-Axis Small cap fund
2-quant small cap fund
3-Kotek smaill cap fund
4-ICICI small cap fund
5-Tata small cap fund

Multi Cap Fund Should invest 65% of total assets in equity and its related securities An open-ended equity
scheme that majorly invests across large cap, mid cap, and small cap stocks
 1- Baroda MID cap fund
2- Mahindra Manulife mid cap
3- Invesco midcap
4- BNB Paribhas mid cap
5- Quant active fund

Large & Mid Cap Fund Should invest 35% of total assets in equity and its
related securities of large cap firms and 35% of total assets in equity and its related securities of
mid cap firms An open-ended equity scheme that majorly investsin both large cap and mid cap stocks

 Mirae Asset Emerging Bluechip Fund.

 Sundaram Large and Midcap Fund.
 Invesco India Growth Opportunities Fund.
 Canara Robeco Emerging Equities Fund.
 Principal Emerging Bluechip Fund.
 LIC MF Large and Midcap Fund.

Dividend Yield Fund

Should invest majorly in dividend yielding stocks and at least 65% of total assets in equity An open-ended equity
scheme that majorly invests in dividend yielding stocks.
Principal Dividend yield fund
UTI Dividend yield fund
Tata dividend yield fund
Icici prudential dividend yield fund
Adityal Birla sun life dividend yield fund

Value Fund Should follow a value investment strategy and

invest 65% of total assets in equity and its related securities An open-ended equity scheme following a value
investment strategy. Invest in underperforming stock.
Eg;- Idfc value fund
Icici pru value fund
Quant long term equity value active
Templetion value fund

Contra Fund Should follow a contrarian investment strategy and invest 65% of total assets in equity and its
related securities An open-ended equity scheme following a contrarian investment strategy and invest in
undervalue stock.
Sbi contra fund
Invesco contra fund
Kotek contra fund

Sectoral/Thematic Fund Should invest at least 80% of total assets in equity and its related securities of a
particular theme or sector An open-ended equity scheme investing in (name of the theme or sector)
Focused Fund Should invest 65% of total assets in equity and its related securities. Should focus on the number
of stocks (a maximum of 30 stocks) An open-ended equity scheme investing in a maximum of 30 stocks
(mention where the scheme intends to focus, viz., multi cap, large cap, mid cap, small cap)

 IDFC Infrastructure Fund.

 Aditya Birla Sun Life Banking And Financial Services Fund.
 Franklin Build India Fund.
 Sundaram Rural and Consumption Fund.
 DSP BlackRock Natural Resources and New Energy Fund.
 Nippon India Power and Infra Fund.
 Mirae Asset Great Consumer Fund.
 Kotak Infrastructure & Economic Reform Fund.
ELSS
Should invest 80% of total assets in equity and its related securities (in accordance with Equity Linked Saving
Scheme 2005 notified by the Ministry of Finance) An open-ended equity-linked savings scheme with
a statutory lock-in of 3 years and tax benefits Please note that a mutual fund house will be allowed to offer either
a value or a contra fund. Also, according to SEBI, the large cap, mid cap, and small cap firms have been defined
as follows:
Large cap firms - Firms ranked between 1 and 100 by full market capitalisation.
Mid cap firms - Firms ranked between 101 and 250 by full market capitalisation.
Small cap firms - Firms ranked above 250 by full market capitalisation.

Debt Schemes
Category of Schemes Scheme Attributes Uniform Description of the Scheme
Low Duration Fund Should invest in debt and money market securities so that the Macaulay duration of the
portfolio is between 6 months and 12 months An open-ended low duration debt scheme
investing in securities with Macaulay duration
between 6 months and 12 months
Ultra Short Duration Fund Should invest in debt and money market securities so that the Macaulay duration of
the portfolio is between 3 months and 6 months An open-ended ultra short-term debt scheme
investing in securities with Macaulay duration between 3 months and 6 months Liquid Fund Should invest in
debt and money market securities having a maturity of up to 91 days only An open-ended liquid scheme

Overnight Fund Should invest in overnight securities with a maturity of 1 day An open-ended debt scheme
investing in overnight securities
Short Duration Fund Should invest in debt and money market securities
so that the Macaulay duration of the portfolio is between 1 year and 3 years
An open-ended short-term debt scheme investing in securities with Macaulay duration between 1 year and 3
years
Medium Duration Fund
Should invest in debt and money market securities so that the Macaulay duration of the portfolio is
between 3 years and 4 years An open-ended medium-term debt scheme
investing in securities with Macaulay duration between 3 years and 4 years

Money Market Fund Should invest in money market securities with maturity of up to 1 year
An open-ended debt scheme investing in money market securities

Medium to Long Duration Fund Should invest in debt and money market securities
so that the Macaulay duration of the portfolio is between 4 years and 7 years
An open-ended medium-term debt scheme investing in securities with Macaulay duration between 4 years and 7

Long Duration Fund Should invest in debt and money market securities so that the Macaulay duration of the
portfolio is more than 7 years An open-ended debt scheme investing insecurities with Macaulay duration of more
than 7 years

Corporate Bond Fund Should invest 80% of total assets in highest rated corporate bonds An open-ended debt
scheme investing in the highest rated corporate bonds

Dynamic Bond Fund Should invest across duration An open-ended dynamic debt scheme investing
across duration
Banking & PSU Fund Should invest 80% of total assets in debt securities
of banks, public sector undertakings, and public financial institutions An open-ended debt scheme investing in
debt securities of banks, public sector undertakings, and public financial institutions.

Credit Risk Fund Should invest 65% of total assets in the below highest rated corporate bonds
An open-ended debt scheme investing in below highest rated corporate bonds
Floater Fund Should invest 65% of total assets in floating rate
instruments An open-ended debt scheme predominantly investing in floating rate instruments

Gilt Fund Should invest 80% of total assets in government securities An open-ended debt scheme investing in
government securities across maturity
Gilt Fund with 10 year Constant Duration Should invest 80% of total assets in government
securities so that the portfolio’s Macaulay duration is 10 years An open-ended debt scheme investing in
government securities that have a constant maturity of 10 years
Hybrid Schemes
Category of Schemes Scheme Attributes Uniform Description of the Scheme

Balanced Hybrid Fund Should invest between 40% and 60% of total assets in equity
and its related securities; should invest between 40% and 60%
of total assets in debt securities. No arbitrage will be allowed An open-ended balanced scheme investing in
equityand debt securities

Aggressive Hybrid Fund Should invest between 65% and 80% of total assets in equity
and its related securities; should invest between 20% and 35% of total assets in debt securities
An open-ended hybrid scheme investing in equity and debtsecurities

Conservative Hybrid Fund

Should invest between 10% and 25% of total assets in equity and its related securities; should invest between
75% and 90% of total assets in debt securities An open-ended hybrid scheme investing mainly in debt securities

Dynamic Asset Allocation or Balanced Advantage Fund Should invest in dynamically managed equity or debt
securities An open-ended dynamic asset allocation fund Multi-Asset Allocation Fund
Should invest in a minimum of three asset classes with a minimum allocation of 10% in each asset class
An open-ended scheme investing in (names of the asset classes) Equity Savings
Should invest at least 65% of the total assets in equity and its related securities and at least 10% of total assets
in debt securities An open-ended scheme investing in equity, arbitrage,and debt Arbitrage Fund Should follow
arbitrage strategy and invest at least 65% of total assets in equity and its related securities An open-ended
scheme investing in arbitrage opportunities Fund houses will be allowed to offer either a balanced fund or an
aggressive hybrid fund.
Solution Oriented Schemes
Scheme Category Scheme Attributes Uniform Description of the Scheme
Children’s Fund Lock-in period for at least 5 years or till the child attains majority age, whichever
is earlier An open-ended fund for investment for children with a lock-in
period for a minimum of 5 years or until the child reaches majority age, whichever is earlier
Retirement Fund Lock-in period of at least 5 years or till retirement age, whichever is earlier An open-ended
retirement solution-oriented scheme with a lock-in period of 5 years or till retirement age (whichever is earlier)
Other schemes
Scheme Category Scheme Attributes Uniform Description of the Scheme

Index Funds/ETFs Should invest at least 95% of total assets in securities of a particular index
An open-ended scheme tracking/replicating (name of the index)

Fund of Funds (Overseas or Domestic)

Should invest at least 95% of total assets in the underlying fund An open-ended fund of fund scheme investing in
(name of the underlying fund

List of New Fund Categories Equity Schemes Equity funds will be further broken down to 10 sub categories listed
below.
a. Multi-cap fund - These schemes invests at least 65% of the total assets in in equity and equity-related instruments.
b. Large cap Fund - These schemes are required to make a minimum investment of 80% of the total assets in the
equity and equity related instruments of large cap companies.
c. Large and Mid-cap fund – The schemes need to make a minimum investment of at least 35% of total assets in both
large cap and mid cap companies each.
d. Mid-cap funds - 65% of the total assets should be invested in the equity and equity related instruments of mid cap
companies for this scheme.
e. Small Cap fund - The investment required by the scheme in equity and equity-related instrument of small cap
companies is 65% of the total assets.
f. Dividend Yield funds - This scheme primarily investments in dividend yielding stocks. The minimum investment
required is 65% of the total assets in equity instruments.
g. Value Fund - The scheme follows a value investment strategy and is mandated to invest at least 65% of the total
assets in equity and equity related instruments.
h. Contra Fund - The contra fund scheme should have a minimum investment of 65% of the total assets in equity
instruments. A contrarian investment strategy should be followed by these schemes.
i. Focused Fund - This scheme invests in equity & equity-related instruments of a limited number of companies not
exceeding 30. At least 65% of the total assets will be invested in aforementioned instruments of companies across
market capitalization.
j. Sectoral/ Thematic - The investment should be made in a particular sector or particular theme only. The minimum
investment for the same in equity and equity-related instruments is 80% of the total assets.
k. ELSS - An open-ended equity linked saving scheme has a compulsory holding period of 3 years but provides tax
bene
Debt Schemes 12/24/2020 List of all Mutual Funds Categories | Groww https://groww.in/mutual-funds/category 5/8
a. Overnight Fund - As the name suggests, these schemes invest in securities with a maturity of 1 day.
b. Liquid funds - Liquid fund schemes invest in debt and money markets with a maximum maturity of up to 91 days
only.
c. Ultra Short Duration Fund – These schemes predominantly invest in debt and money market instruments with a
Macaulay duration period of 3 to 6 months.
d. Low Duration Fund - This scheme invests with a Macaulay duration of 6 to 12 months and the investment is
primarily done in debt and money market instruments.
e. Money Market Fund – These schemes invest in money market instruments with a maturity of up to one year.
f. Short Duration Fund – As the name suggests, these schemes try to invest in debt and money market instruments
while ensuring that the Macaulay duration of the portfolio remains around 1-3 years.
g. Medium Duration Fund - Medium Duration fund schemes invest in debt and money market instruments while
ascertaining that the Macaulay duration of the portfolio remains around 3 to 4 years.
h. Medium to Long Duration Fund - These schemes investment into debt and money market instruments with
Macaulay duration of the portfolio around 4 to 7 years.
i. Long Duration Fund - The portfolio of these schemes has a Macaulay duration of over 7 years. Investment is
predominantly made in debt and money market instruments.
j. Dynamic Bond - These schemes follow a dynamic approach towards maturity of securities in the portfolio.
Investments are done across durations.
k. Corporate Bond Fund - These schemes invest at least 80% of total assets in only high rated corporate bonds.
l. Credit Risk Fund - The investment is made in instruments below the high rated instruments. The minimum
investment required in corporate bonds for the same is 65% of the total assets.
m. Banking and PSU funds - These funds need to have a minimum of 80% of investment of total assets in debt
instruments of bank, public sector undertakings and public
n. Gilt Fund - The minimum investment requirement for gilt funds is 80% of the total assets in Gsecs across its
maturity. o. Gilt Fund with 10-year constant duration - 80% of the total assets should be invested in the Gsecs such
that Macaulay duration of the investment is equal to 10 years. 12/24/2020 List of all Mutual Funds Categories |
Groww https://groww.in/mutual-funds/category 6/8 p. Floater Fund - These funds are mandated to have a minimum
investment of at least 65% of the total assets in.
p. Floater Fund - These funds are mandated to have a minimum investment of at least 65% of the total assets in
Hybrid Schemes
a. Conservative Hybrid Fund - The fund is required to make investments in both equity and debt instruments. The
investment requirement for equity & equity-related instruments is between 10% to 25% of the total assets and that
for debt instruments it is 75% to 90% of the total assets.
b. Balanced Hybrid Fund - The minimum investment requirement for this fund scheme is 40% to 60% of the total
assets for both equity as well as debt instruments. Arbitrage is not allowed in this scheme.
c. Aggressive Hybrid Fund - These funds invest in both equity & equity-related and debt instruments with a
minimum requirement of 65-80% for the former and 25-30% for the latter.
 d. Dynamic Asset Allocation or Balanced Advantage - This scheme is free to dynamically change the investment in
equity & debt instruments.
e. Multi Asset Allocation - These hybrid fund schemes allocate minimum 10% in three asset classes. This scheme is
mandated to invest at least in 3 asset classes.
f. Arbitrage Fund - As the name suggests, these schemes follow an arbitrage strategy and are required to invest 65%
of the total assets in equity & equity-related instruments.
g. Equity Savings - This scheme invests in both equity and debt securities. The minimum requirement for equity &
equity-related instruments is 65% of the total assets and for debt instruments it is 10% of the total assets. It is
necessary to show the minimum hedged and unhedged in SID.
Solution-oriented Schemes:
a. Retirement Fund - The retirement fund scheme has a lock in period of 5 years or the retirement age whichever is
earlier.
b. Children’s Fund - This solution-oriented scheme has a lock in for at least 5 years or till the child turns major
whichever is earlier. Other Schemes: Index Funds/ ETFs - These schemes replicate a particular index by investing at
least 95% of the total assets in the securities of the index being replicated

Other Schemes:
Index Funds/ ETFs - These schemes replicate a particular index by investing at least 95% of the total assets in the
securities of the index being replicated.