In the back of rising popularity of equity savings mutual fund schemes, the National Stock Exchange (NSE) has launched a new index called Nifty Equity Savings index. This index now serves as the benchmark of an equity savings fund. An equity savings fund invests about 20-40% in equities, about 30-35% in arbitrage opportunities and the rest in debt.
Predictably, this index will consist a 35% exposure to Nifty 50 total returns index (TRI), 30% towards equity arbitrage (long position of Nifty 50 TRI and an equivalent short position in Nifty 50 Futures index), 30% towards Nifty Short Duration Debt index and 5% towards Nifty 1 day rate index.
