By Nivesh Gyan 27 DecemberCategory: Build Wealth
Suitable for lump-sum investments as replacement of longer term Fixed Deposits (one year and more).
In current environment, it is difficult for investors to select the right avenue for investment, particularly lump-sum investments. On one side, interest rates on fixed deposits are at all-time low, and stock markets are making new highs on the other.
Equity Savings Funds are new innovative products by mutual funds to take care of this dilemma!
Equity Savings Funds invest in a mix of Equity, Arbitrage and Debt securities. Allocation is generally between 20% to 40% for Equity, 30% to 45% for Arbitrage and up to 35% for Debt. Arbitrage and Debt portions ensure stable returns, while Equity portion ensures overall superior returns. Fund managers also have flexibility to change allocations depending on current market conditions, i.e. higher Equity allocation in case of stock market correction.
These funds can be used for lump-sum investments of more than one-year horizon. For shorter horizon or if regular cash flows are required, then one should choose dividend option. Otherwise Growth options should be selected to take benefit of compounding.
|Dividend (Rs.)||NAV (Rs.)||1 Yr Return (%)||3 Yr Return (%)||Dividend Yield|
|Edelweiss Equity Savings Advantage Fund – Monthly Dividend||0.08||12.8804||16.3||8.33||7.5%|
|Aditya Birla SL Equity Savings – Quarterly Dividend||0.24||11.76||19.4||9.7||8.2%|
|Kotak Equity Savings Fund – Monthly Dividend||0.0473||11.3728||15.39||9.03||5.0%|
|ICICI Prudential Equity Income Fund – Monthly Dividend||0.06||11.37||12.3||8.95||6.3%|
|HDFC Equity Savings Fund – Quarterly Dividend||0.25||12.108||17.86||10.78||8.3%|