MANU/SMFD/0033/2021

Ministry : Securities and Exchange Board of India

Department/Board : Investment Management Department

Circular No. : SEBI/HO/IMD/IMD-II DF3/P/CIR/2021/652

Date : 27.10.2021

All Mutual Funds/
Asset Management Companies (AMCs)/
Trustee Companies/Boards of Trustees of Mutual Funds/
Association of Mutual Funds in India (AMFI)

Sir/Madam,

Guiding principles for bringing uniformity in benchmarks of Mutual Fund Schemes

1. In order to standardize and bring uniformity in the Benchmarks of Mutual Fund Schemes and taking into account the recommendations of Mutual Fund Advisory Committee (MFAC), it has been decided that there would be two-tiered structure for benchmarking of schemes for certain categories of schemes. The first tier benchmark shall be reflective of the category of the scheme, and the second tier benchmark should be demonstrative of the investment style/strategy of the Fund Manager within the category. All the benchmarks followed should necessarily be Total Return Indices.

2. The following are the guiding principles for first tier benchmarks:

i. For Income/Debt Oriented Schemes

First Tier: One Broad Market Index per Index Provider for each category e.g.: NIFTY Ultra Short Duration Debt Index or CRISIL Ultra Short Term Debt Index for Ultra Short Duration Fund Category

Second Tier: Bespoke according to Investment Style/Strategy of the Index e.g.: AAA Bond Index

ii. For Growth/Equity Oriented Schemes

First Tier: One Broad Market Index per Index Provider for each category e.g.: S&P BSE 100 Index or NSE 100 Index for Large Cap Fund Category Second Tier: Bespoke according to Investment Style/Strategy of the Index e.g.: Nifty 50 Index

iii. For Hybrid and Solution Oriented Schemes: