The disease of featuritis returns

Eight years ago, when SEBI first rationalised mutual fund categories, I wrote that it was a good idea executed imperfectly. The 2017 circular reduced the chaos of overlapping schemes into 36 categories. In practice, the total number of funds fell by just 29. Fund companies found ways to fit existing products into new boxes without changing much. It was like rearranging the furniture and calling it renovation. Today, SEBI has issued a sweeping circular that supersedes the entire framework. Parts of it made me genuinely happy. Other parts made me reach for the calculator to count how many new NFOs the industry would launch by Diwali. Let me start with the good. SEBI has killed Solution-Oriented Schemes. Dead. Subscriptions stopped immediately. I have been saying for years that retirement funds and children's funds were a labelling exercise dressed up as a category. A rupee invested in a "retirement fund" is no different from a rupee in a balanced fund. Your mutual fund doesn't know whether you'll spend the money on retirement or a trip to Ladakh. It took SEBI eight years, but they got there. Main khush hoon. The portfolio overlap restriction on sectoral and thematic funds is equally welcome.