Hybrid: Equity Savings

What is it?

Equity savings funds invest in equity, debt, and arbitrage instruments. According to the SEBI guidelines, equity saving funds must invest a minimum of 65% in equity instruments and a minimum of 10% in debt instruments.

Objective

The objective of the fund is to generate better returns than bank fixed deposits by investing in equity and debt and benefitting from arbitrage opportunities.

Suitability and opinion

These funds are suitable for conservative equity investors and first-time equity investors as these funds have lower volatility compared to pure equity funds and provide higher returns compared to pure debt funds. We believe that conservative equity investors can consider this category with the ideal time horizon of 3 or more years. But don't forget that as at least 65% of the fund assets are equity they carry higher risks compared to debt funds.