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Please provide risk comparison and investment style for Equity Income Category Schemes

Many MF schemes launched in 2015 under Equity Income category i.e. equity aprx 25 to 45%, plus Arbitrage making it 65% and rest in debt. Kindly give detailed analysis of these schemes with respect to risk comparison and investment style(max/min) in debt and equity?

Jan 28, 2016 by Ramesh B, Vadodara  |   Mutual Fund

These funds are well suited for investors with moderate risk tolerance levels and also offer tax efficiencies. The arbitrage and debt portions serve to moderate the volatility, while the arbitrage portion ensures equity taxation. Though a number of NFOs were launched in 2015 using this investment strategy, this strategy is certainly not entirely new. ICICI Prudential Balanced Advantage Fund has used the same strategy. The equity allocation ranges from ranges between 30 – 80% based on dynamic asset allocation strategy determined by Price / Book ratio of the equity market. The scheme uses arbitrage to ensure equity taxation. The risk adjusted performance of this scheme has been excellent (please see our article, An ideal balanced fund for investors with moderate risk appetite). Among the 2015 NFOs, we have also covered the Reliance Equity Savings fund (please see our article, Reliance Equity Savings Fund: Capital appreciation and Income with moderate risk). If you go through our review of these two balanced fund schemes, hopefully, you will have a better understanding of the characteristics of these schemes.

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