Equity Savings Fund- One Fund with the strength of Three

07 Dec 2023

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Equity Savings Fund- One Fund with the strength of Three

Equity Savings Funds generate returns via investments in equity, debt, and arbitrage opportunities, distinguishing them from other hybrid funds. The fund's overall equity exposure is partially hedged, mitigating volatility compared to an aggressive hybrid fund.

1yr2yr3yr5yr10yr
Equity Savings Fund Category Performance 10.5%7.4%9.7%8.3%8.3%

Source : Morningstar

Equity savings fund have historically delivered stable returns and are less volatile than pure equity funds due to diversification in three asset classes i.e Equity, Debt & Arbitrage and also enjoys equity taxation.

Features & Advantages of Equity Savings Funds

1. Equity Savings Funds have three components viz. equity, debt, arbitrage, each fulfilling a distinct role.

2. Equity savings fund tend to be less volatile than pure equity funds due to diversification in three asset classes.

3. The funds invest minimum 65% in Equity and equity related instruments and min 10% debt instruments and derivatives exporsure for hedging as mentioned in the SID.

4. Equities have potential to generate long-term inflation-beating returns.

5. The arbitrage component capitalizes on market price inconsistencies, offering low-risk returns and enhancing stability in fund performance.

6. The debt component can provide market-linked fixed income returns and potentially stabilize the portfolio in volatile markets.


Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. The information provided is generic in nature and is for informational purpose only. Please consult your financial advisor before taking any decision.

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