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Equity Savings Fund
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List of Equity Savings Mutual Funds in 2024
Top 10 Equity Savings Mutual Funds to invest in 2024
Below are the equity savings mutual funds in india:
1. SBI Equity Savings Fund Direct (G)
SBI Equity Savings Fund Direct (G) is a Hybrid fund that has delivered a 1 Year return of 14.6%, a 3 Years return of 11.0% and a 5 Years return of 11.8%. The fund has an expense ratio of 0.7% and an AUM of ₹5616 crores as of 2024-11-29. It was Launched on 2015-05-27. The minimum SIP investment is ₹1000 and the minimum lump sum investment is ₹5000. The fund allocates 30.64% to equities, 26.11% to debt and 38.24% to other assets.
2. HDFC Equity Savings Fund Direct (G)
HDFC Equity Savings Fund Direct (G) is a Hybrid fund that has delivered a 1 Year return of 15.4%, a 3 Years return of 11.1% and a 5 Years return of 12.0%. The fund has an expense ratio of 0.9% and an AUM of ₹5463 crores as of 2024-11-29. It was Launched on 2013-01-01. The minimum SIP investment is ₹1000 and the minimum lump sum investment is ₹5000. The fund allocates 31.17% to equities, 24.36% to debt and 42.26% to other assets.
3. Mirae Asset Equity Savings Fund Direct (G)
Mirae Asset Equity Savings Fund Direct (G) is a Hybrid fund that has delivered a 1 Year return of 16.8%, a 3 Years return of 10.9% and a 5 Years return of 12.8%. The fund has an expense ratio of 0.3% and an AUM of ₹1353 crores as of 2024-11-29. It was Launched on 2018-12-17. The minimum SIP investment is ₹1000 and the minimum lump sum investment is ₹5000. The fund allocates 35.56% to equities, 27.25% to debt and 37.19% to other assets.
4. Mahindra Manulife Equity Savings Fund Direct (G)
Mahindra Manulife Equity Savings Fund Direct (G) is a Hybrid fund that has delivered a 1 Year return of 14.5%, a 3 Years return of 10.5% and a 5 Years return of 12.8%. The fund has an expense ratio of 0.7% and an AUM of ₹572 crores as of 2024-11-29. It was Launched on 2017-02-01. The minimum SIP investment is ₹1000 and the minimum lump sum investment is ₹5000. The fund allocates 30.18% to equities, 28.73% to debt and 38.34% to other assets.
5. UTI Equity Savings Fund Direct (G)
UTI Equity Savings Fund Direct (G) is a Hybrid fund that has delivered a 1 Year return of 14.0%, a 3 Years return of 11.2% and a 5 Years return of 11.8%. The fund has an expense ratio of 0.8% and an AUM of ₹613 crores as of 2024-11-29. It was Launched on 2018-08-30. The minimum SIP investment is ₹1000 and the minimum lump sum investment is ₹5000. The fund allocates 23.39% to equities, 22.26% to debt and 54.35% to other assets.
6. Sundaram Equity Savings Fund Direct (G)
Sundaram Equity Savings Fund Direct (G) is a Hybrid fund that has delivered a 1 Year return of 17.2%, a 3 Years return of 12.4% and a 5 Years return of 12.3%. The fund has an expense ratio of 0.5% and an AUM of ₹990 crores as of 2024-11-29. It was Launched on 2013-01-02. The minimum SIP investment is ₹1000 and the minimum lump sum investment is ₹5000. The fund allocates 41.00% to equities, 20.40% to debt and 38.61% to other assets.
7. Sundaram Equity Savings Fund Direct (G)
Sundaram Equity Savings Fund Direct (G) is a Hybrid fund that has delivered a 1 Year return of 17.2%, a 3 Years return of 12.4% and a 5 Years return of 12.3%. The fund has an expense ratio of 0.5% and an AUM of ₹990 crores as of 2024-11-29. It was Launched on 2013-01-02. The minimum SIP investment is ₹1000 and the minimum lump sum investment is ₹5000. The fund allocates 41.00% to equities, 20.40% to debt and 38.61% to other assets.
8. Kotak Equity Savings Fund Direct (G)
Kotak Equity Savings Fund Direct (G) is a Hybrid fund that has delivered a 1 Year return of 18.0%, a 3 Years return of 12.8% and a 5 Years return of 12.3%. The fund has an expense ratio of 0.7% and an AUM of ₹7804 crores as of 2024-11-29. It was Launched on 2014-10-13. The minimum SIP investment is ₹1000 and the minimum lump sum investment is ₹5000. The fund allocates 34.03% to equities, 19.44% to debt and 45.56% to other assets.
9. ICICI Prudential Equity Savings Fund Direct (G)
ICICI Prudential Equity Savings Fund Direct (G) is a Hybrid fund that has delivered a 1 Year return of 10.2%, a 3 Years return of 9.0% and a 5 Years return of 8.6%. The fund has an expense ratio of 0.5% and an AUM of ₹12406 crores as of 2024-11-29. It was Launched on 2014-12-05. The minimum SIP investment is ₹1000 and the minimum lump sum investment is ₹5000. The fund allocates 16.32% to equities, 16.40% to debt and 65.76% to other assets.
10. DSP Equity Savings Fund Direct (G)
DSP Equity Savings Fund Direct (G) is a Hybrid fund that has delivered a 1 Year return of 16.4%, a 3 Years return of 10.9% and a 5 Years return of 11.0%. The fund has an expense ratio of 0.5% and an AUM of ₹2162 crores as of 2024-11-29. It was Launched on 2016-03-28. The minimum SIP investment is ₹1000 and the minimum lump sum investment is ₹5000. The fund allocates 28.38% to equities, 21.99% to debt and 45.86% to other assets.
What is an Equity Savings Fund?
Equity savings fund is an open-ended mutual fund scheme that invests its assets in equity, arbitrage, debt opportunities. This is a new mutual fund category under the hybrid Mutual Funds that were introduced by SEBI in its mutual fund recategorization in 2017. According to SEBI regulations, the fund should invest a minimum of 65% of assets in equity, and a minimum of 10% in debt securities.
Equity savings funds are considered safer than regular equity mutual funds and more tax efficient than the regular debt funds. This is because of their exposure to both equity and debt securities. Moreover, this helps the fund manager to manage the fund efficiently by switching between asset classes according to the market conditions and sentiments. This will help them contain losses and maintain the risk exposure of the fund at a moderate level.
Also, since the fund invests in arbitrage opportunities, the fund capitalizes on the price fluctuations in the market. The fund’s equity exposure helps in preventing the erosion of the investor’s purchasing power. At the same time, the debt and arbitrage portion help in minimizing the downside market fluctuations.
As the fund majorly invests in equity and arbitrage opportunities, it is much more tax efficient than debt funds if held for more than one year. Hence, returns equity savings fund are taxable like any other equity fund. The short-term capital gains (STCG) are taxable at 15%, and the long term capital gains (LTCG) exceeding INR 1 lakh are taxable at 10%. There is no tax on LTCG below INR 1 lakh.
Equity savings funds are a perfect investment option for conservative investors. These funds also suit investors who are looking for short term investment alternatives to debt mutual funds and fixed deposits.
Top 5 Equity Savings Funds to Invest in 2024
Direct Plan
| Fund Name | 3 Years Return | 5 Years Return |
| SBI Equity Savings Fund Direct Growth | 10.1% | 11.8% |
| HDFC Equity Savings Fund Direct Growth | 10.5% | 12% |
| Mirae Asset Equity Savings Fund Direct Growth | 10% | 12.8% |
| Mahindra Manulife Equity Savings Fund Direct Growth | 9.5% | 12.9% |
| UTI Equity Savings Fund Direct Growth | 10.6% | 11.9% |
Regular Plan
| Fund Name | 3 Years Return | 5 Years Return |
| SBI Equity Savings fund Regular Growth | 10.3% | 11.3% |
| HDFC Equity Savings Fund Regular Growth | 9.6% | 11.2% |
| ICICI Prudential Equity Savings Fund Regular Growth | 8.4% | 8.1% |
| Mirae Asset Equity Savings Fund Regular Growth | 9.3% | 12% |
| Axis Equity Saver Fund Regular Growth | 7.8% | 9.8% |
How does an Equity Savings Fund work?
Equity saving scheme is a hybrid mutual fund scheme that invests at least 65% of its assets in equity and 10% of its assets in debt securities. According to SEBI regulations, the fund can invest in equity and equity related instruments, debt securities, and arbitrage opportunities using hedging strategies.
The fund has exposure to equity and debt securities, making it a diversified fund and hence spreading the risk to more than one asset class. Moreover, the fund invests in arbitrage opportunities making it easier for the fund managers to switch between asset classes according to market sentiments. This will enable fund managers to manage the risk in an efficient manner.
Equity saving schemes can also invest in using hedged and unhedged strategies. The fund actively uses derivative strategies to manage the risk by investing through hedged strategies. At the same time, the fund also increases its return by investing in unhedged strategies.
The fund offers better returns than fixed deposits in the short term as it invests in arbitrage opportunities. And the fund is tax efficient as the fund majorly invests in equities and follows the equity taxation rules.
Things to Consider Before Investing
Following are certain factors that one should consider before investing in Equity Savings fund:
Quantitative Factors
- Risk and Performance Analysis: Studying the risk factors will help in understanding the consistency in the performance of the fund across various market cycles. For example, considering the rolling returns over the short term and long term, and the risk-reward ratios such as Sharpe Ratio, Standard Deviation, etc. Investors can use mutual fund return calculators like SIP calculator and lumpsum return calculator to estimate their potential returns. Scripbox’s mutual fund return calculators are available online and are free to use. They help in estimating the potential SIP return and lumpsum return from mutual fund investments.
- Performance across market cycles: It is vital to understand the fund’s ability to perform consistently across different market cycles. Therefore, comparing the performance of the fund with their benchmark index will help in understanding the deviation. It is important to compare the performance across both bull phase and bear phase.
Qualitative Factors
The quality of the fund’s portfolio plays an important role in the performance. Following are some factors that need to be considered while understanding the portfolio:
- Diversification: A fund should offer adequate diversification to its investors. An overly concentrated portfolio will react drastically to market movement. Therefore, a well-diversified portfolio should have its top 10 holdings under 50%. This will ensure the market risk is spread across the portfolio.
- Credit Quality: For the debt component of the fund holding, it is essential to observe the credit quality of the holdings. The fund mustn’t hold too many low rated securities (securities with rating AA or below) or unrated debt instruments. Ideally, a fund with good credit quality should be considered for investment.
- Turnover Cost: Turnover cost indicates frequent buying and selling of securities. A higher turnover cost is bad as it lowers the portfolio returns for the investor. Therefore, it is good to choose funds with a not very high turnover ratio (expense ratio).
Fund House and Fund Management
The reputation of the fund house and the fund manager’s experience also plays an important role while choosing a fund to invest. The fund manager should have good industry and fund management experience. However, experience doesn’t just mean the number of years in the work. It also means that the funds they have managed in the past have been consistently performing well.
The decisions a fund manager takes plays an important role in the fund’s ability to generate significant returns. Therefore, the decisions that the manager takes should be backed by thorough mutual fund research and analysis.
A fund house’s reputation is also important while choosing a fund to invest. The fund house should ideally be performing consistently across all the funds they offer. A fund house with schemes that perform well indicates the efficiency of their investment process and risk management techniques.
Who should invest in an Equity Savings Fund?
Equity savings mutual funds best suit investors looking for equity exposure for a short term investment horizon. The ideal investment horizon for these funds is around 24-30 months. These funds have exposure to debt and arbitrage opportunities as well and hence making them less risky than pure equity funds. However, they come with an advantage of better returns than pure debt funds due to their equity exposure. Hence investors with low understanding of risk who want equity exposure can also invest in these funds.
Equity Savings Mutual Funds are a perfect substitute to fixed deposits as they offer higher returns with somewhat similar risk. Moreover, these funds are tax efficient than debt funds. These funds are taxed like other equity funds where the long term is any period after one year. Hence the tax rate for these funds is lower than debt funds. Hence investors looking for lower tax liability can invest in these funds.
Investors who are worried about market volatility can invest in these funds. Additionally, investors who want to venture out from the conventional savings options like FDs and RDs can consider investing in an equity savings fund. However, it is important to note that mutual fund investments are subject to market risk. Hence, one should carefully align their investment objectives to their investment choices.