This saving fund of ICICI Prudential is special, you get many benefits like FD and equity fund
If you are planning to invest, then this news is useful for you. All the investors want that wherever they invest their money, they should get quick income from there. Now in today’s world it is difficult to get such returns but it is not impossible. Yes, even in today’s era of inflation, you can earn handsomely from investment. ICICI Prudential is giving you an opportunity to earn handsomely from your savings fund.
ICICI Prudential’s Equity Savings Fund can be a better option for you. In this, you get benefits like safety like fixed deposits and great returns like equity funds. Let us know what is ICICI Prudential’s Equity Savings Fund
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What is ICICI Equity Savings Fund?
The offering is a one of a kind hybrid fund with equity, debt and equity arbitrage opportunities in the portfolio. As per norms, an equity savings scheme should invest at least 65% in equity and equity related instruments while the minimum allocation to debt should not be less than 10%.
Market risk is zero
ICICI Prudential Equity Savings Fund is the largest in the category with an AUM of Rs 4,916.95 crore. The fund’s net equity level is typically 15-20% along with stock arbitrage ranging from 50-55%. Thus, the gross equity level remains at around 70%. The remaining 30% is allocated to debt. Due to this approach, ICICI Prudential Equity Savings Fund is well positioned to navigate rising or falling equity markets.
Given the nature of the fund, the fund is better positioned to hedge downside risk than regular equity funds or aggressive hybrid fund categories. Also, the fund has the potential to give higher returns as compared to regular debt funds or traditional financial investment avenues, and at the same time it has the potential to save tax. Given that the total equity allocation is always maintained at 65% or more, an equity savings fund is treated like an equity fund for tax purposes.
The portfolio gets strengthened
ICICI Prudential’s approach of a combination of arbitrage, fixed income and covered calls provides stability to the portfolio. This is one aspect that fixed income investors are always on the lookout for. An investor may consider ICICI Prudential Equity Savings Fund as a solution to steady returns with low equity exposure, as a source scheme for Systematic Transfer Plan (STP), as an alternative to post-tax debt schemes can be picked up. And those looking for a complementary strategy to parking funds apart from arbitrage or debt can also consider this.
The equity component in the portfolio brings growth or capital appreciation while the debt and arbitrage component provides stability to the portfolio by generating steady returns and helps in protecting the downside of the portfolio. Generally, fund managers prefer large caps on broad markets for equity allocation. When it comes to debt, the allocation is in the form of AAA rated paper or shorter duration government securities.