What are Equity Savings Schemes Funds?
Equity Savings Funds are hybrid mutual funds that invest nearly the same proportion of their assets in equities, FD-like instruments, and safe hedge funds. These funds typically offer higher returns than bank Fixed Deposits with equivalent conditions. Essentially, equity savings funds generate returns through investments in equity, debt, and arbitrage opportunities. This last feature distinguishes them from other hybrid funds. Essentially, the fund manager seeks to capitalise on pricing inefficiencies in the cash and derivatives markets. Thus, the fund’s overall exposure to stocks is partly hedged, decreasing its risk compared to a risky hybrid fund, in which the equity exposure is unhedged in its totality. It is commonly known as ESS funds.
Table of Content
- Features of Equity Savings Schemes Funds
- Purpose of Equity Savings Schemes Funds
- Who Should Invest in Equity Savings Schemes Funds?
- Factors to Consider Before Investing in Equity Savings Schemes Funds
- Advantages of Investing in Equity Savings Schemes Funds
- Disadvantages of Investing in Equity Savings Schemes Funds