Mutual fund houses in India are set to roll out a wave of specialised investment options following recent regulatory amendments by SEBI, signalling a strategic shift towards diversification and targeted fund offerings.
Mutual fund houses in India are preparing a wave of niche launches after recent regulatory changes opened up new product structures and broadened the scope for portfolio construction. According to Business Standard, the new offerings are expected to arrive in the coming weeks and include funds that would previously not have been possible under the old rules.
Among the launches under discussion are Motilal Oswal’s Multi-Thematic Active Fund of Funds, which would spread money across several thematic equity funds, and DSP Mutual Fund’s Financial Services Sectoral Debt Fund, which would concentrate on debt and money market instruments issued by banks, non-bank lenders and other financial firms. AlphaGrep Mutual Fund is also lining up a Liquid Omni Fund of Funds, which would be the first such product in the liquid category and would invest in a mix of active and passive liquid schemes. HDFC Mutual Fund’s FTSE India ETF is also expected to join a small group of India-focused index trackers from a foreign benchmark provider.
The pipeline reflects a broader push by the Securities and Exchange Board of India to widen the menu available to asset managers. In February, the regulator allowed equity mutual funds to invest in gold and silver, giving managers another tool for diversification when markets are volatile. It also introduced a new life-cycle fund category and permitted funds to launch sector-specific debt schemes, provided at least 80% of the portfolio is invested in debt and debt-related instruments from that sector.
The changes have come at a time when fund houses are looking for ways to revive new fund offer activity after a weak first half of 2026. Business Standard reported that active equity NFO collections fell to a six-year low in the first half of calendar 2026 as market swings and uncertainty dampened demand. With equities steadier and sentiment improving, fund managers are now betting that investors may be more receptive to more specialised products.
A separate revival is also underway in balanced hybrid funds, a category that had largely disappeared for nearly a decade. After SEBI’s 2017 categorisation exercise forced managers to choose between aggressive hybrid funds and balanced hybrid funds, most houses opted for the former because they qualified for equity taxation. The renewed interest suggests fund houses are once again willing to revisit products that blend growth and stability for retail investors.
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