Equity Savings Fund- One Fund with the strength of Three
07 Dec 2023
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.| 1yr | 2yr | 3yr | 5yr | 10yr | |
|---|---|---|---|---|---|
| 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.
Popular Infographics
Tag Clouds
Related Infographics
-
Disclaimer
The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
