Why does SEBI categorise mutual funds?

Before categorisation, funds with the same name could follow very different strategies. SEBI's framework gives each scheme one category with defined rules, so investors can compare like with like and each fund house offers only one scheme per category in most cases.

What is the difference between large cap, mid cap and small cap?

They refer to company size by market capitalisation. SEBI treats the top 100 listed companies as large cap, the next 150 (101st to 250th) as mid cap, and the rest as small cap. The exact list is updated by AMFI every six months.

What is a flexi cap fund?

A flexi cap fund must keep at least 65% in equity but can invest in companies of any size in any proportion, so the fund manager decides how much to hold in large, mid and small caps.

Should I compare a large cap fund with a small cap fund?

No. They take different levels of risk and are meant for different purposes. Compare a fund with others in its own category.

Mutual fund categories in India: large, mid, small and flexi cap

Written and reviewed by Omm · Last reviewed 2 October 2026 · General information, not investment advice

SEBI’s categorisation framework places every open-ended scheme into one defined category with its own investment rules. That is why this site’s tables always show a category and why comparing within a category is the fair way to use them. The thresholds below are the main rules at the time of writing; SEBI can revise them, so check the current circular or AMFI for the exact wording.

Equity categories

Large cap: at least 80% in large-cap companies (the top 100 by market value).
Mid cap: at least 65% in mid-cap companies (ranked 101 to 250).
Small cap: at least 65% in small-cap companies (ranked 251 onward).
Large & mid cap: at least 35% in each of large and mid caps.
Multi cap: at least 25% in each of large, mid and small caps.
Flexi cap: at least 65% in equity, with no restriction on company size.
Focused: at most 30 stocks.
Value / contra: follow a value or contrarian strategy.
Dividend yield: mainly stocks that pay higher dividends.
Sectoral / thematic: at least 80% in one sector or theme, such as banking or technology.
ELSS: tax-saving funds with a three-year lock-in. See ELSS.

In general, small-cap funds are the most volatile and large-cap funds the least among these, and sectoral funds depend on one part of the economy.

Hybrid categories

These mix equity and debt. They include aggressive hybrid (mostly equity), conservative hybrid (mostly debt), balanced advantage / dynamic asset allocation (the equity share changes with a model), multi asset allocation (equity, debt and gold or other assets), equity savings and arbitrage (which tries to profit from price gaps between cash and futures markets with low risk).

Debt categories

Debt funds are grouped mainly by how long their bonds last and by credit quality: overnight, liquid, ultra short, low duration, money market, short, medium, long duration, corporate bond, credit risk, banking & PSU, gilt and others. See debt mutual funds explained.

Other categories

Index funds and ETFs track an index (see index funds vs ETFs vs active funds), fund of funds invest in other funds (domestic or overseas), and solution-oriented schemes such as retirement and children’s funds come with a lock-in.

How AMFI’s naming shows up here

AMFI’s daily file uses the older names for some schemes (for example “Equity Schemes” and “Hybrid Scheme”) and the newer names for others. This site merges the two into one name per category so that you see, for example, one “Small Cap” group.

Using categories well

Filter by category in the screener, then compare returns over several periods, risk and cost within it. A fund at the top of a high-risk category is not “better” than a fund in a lower-risk category; it just took more risk.