In this regard, equity savings funds from the hybrid category may be considered by investors with a modest risk appetite looking for downside protection, but not superior returns. Apart from equity and debt, these funds use equity arbitrage via derivatives to reduce risks and potentially generate better inflation adjusted returns. One key advantage that these funds offer is the equity taxation, as their gross equity exposure (including arbitrage) is above 65% of the portfolio at all times Here is more on how equity savings funds could be a hybrid category that is a useful addition to portfolios of conservative investors. Of course, some risks also need to be considered before taking a final call.
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