EQUITY SAVINGS FUNDS: FOR BETTER THAN-DEBT RETURNS WITH LOW RISK
Outlook Business|June 2023
As interest rates reach their peak, select fixed-income options look attractive.
EQUITY SAVINGS FUNDS: FOR BETTER THAN-DEBT RETURNS WITH LOW RISK

TEJAS SHAH Partner, TEJDHAVAL ASSOCIATES LLP

But equities continue to be volatile due to a global economic slowdown, geopolitical factors and some export-oriented sectors facing a reduced demand environment. Valuations, too, aren't very comfortable. Meanwhile, the finance bill has also taken away the indexation benefits in debt funds and removed all classifications of gains - long or short term - and brought all profits under the tax ambit.

In such a scenario, how could investors with a moderate risk appetite make debt-like or slightly better fixed income returns without too much volatility and benefit from equity-like taxation on gains?

That's where equity savings funds come into the picture and fit the requirement perfectly. The category of funds invests in a mix of equities, derivatives and bonds to create a portfolio that is geared to deliver steady returns with low volatility and risks.

Here's more on how equity savings funds could be a suitable addition to investors' portfolios in the present market conditions.

De-risking and hedging

This story is from the June 2023 edition of Outlook Business.

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This story is from the June 2023 edition of Outlook Business.

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