Can Fund Houses Launch Two Schemes in One Category?

SEBI has proposed a major revamp to allow mutual fund companies to launch a second scheme within the same category if their existing fund is over five years old and holds more than ₹50,000 crore in assets. This change aims to address the challenge of oversized funds, which can make it hard for managers to stick to their investment style.

When fund houses launch a second scheme, the first fund stops accepting new lump-sum investments but continues to process existing SIPs.Both schemes must use the same investment strategy and follow similar cost limits, making it easier for investors to compare and choose what suits them best. Fund houses will give each scheme a distinct name so investors do not get confused.

This update hopes to give investors more options and help fund managers stay focused as funds grow in size and complexity. If adopted, these changes could make it simpler for investors to find schemes that match their goals and encourage more transparent fund management.