About Equity Savings Mutual Fund
Equity savings funds are open-ended mutual fund schemes. These funds invest in diversified asset classes such as equity, debt and arbitrage securities. SEBI introduced this mutual fund category in 2017 as part of its mutual fund re-categorisation exercise. As per SEBI regulations, the fund should invest a minimum of 65% in equities and at least 10% in debt holdings. The fund manager is free to invest in equity and equity-related instruments, debt securities, and arbitrage securities through hedging strategies. The total risk factor in equity savings funds is flattened, and diversification is preserved because the exposure is distributed across both stock and debt instruments. The fund is also free to Invest in arbitrage opportunities, which allows fund managers to navigate through asset classes based on market conditions.
How Do Equity Savings Funds Work?
Equity funds mostly invest in the equities of different firms. The asset allocation is made in small-cap, mid-cap, or large-cap stocks, depending on the market conditions. The remaining sum is put in market instruments such as debt. The portfolio's arbitrage element minimises downside risk while generating consistent income from debt-related assets.
Features of Equity Savings Mutual Funds
- Allocation of Asset: The fund manager in equity savings schemes makes investments in mixed asset classes such as equity, debt instruments, and arbitrage opportunities.
- Hybrid Nature: Equity savings funds are of a hybrid nature as their portfolios include both equity and debt investments. As a result of the hybrid structure, these funds are likely to reward investors with an optimal risk-return balance.
- Risk Management: The equity savings fund reduces the overall fluctuation of funds and risks due to the allocation of investments into debt instruments and potential arbitrage opportunities.
Advantages of Equity Savings Funds
- Arbitrage: Arbitrage is a trading practice wherein investors buy an asset from one market and sell it in another market to make a profit from the minor differences in the asset’s listed price. In volatile markets, arbitrage can generate comparable or even higher returns than liquid funds.
- Less Volatility: Equity savings funds are more resistant to market ups and downs as compared to shares because investments are split between debt and arbitrage holdings.
- Diversification: Investment in equity savings schemes can help you save numerous inconveniences, such as having to pick out a variety of funds separately in order to keep enough diversification in your portfolio and then monitoring the performance of each one of them.
Risks Involved in Equity Savings Funds
Equity savings funds are exposed to multiple risks as they invest in a mix of asset classes due to their hybrid nature. The equity portion in the equity savings scheme is subject to market conditions. The debt portion could be impacted by the adverse change in interest rate by RBI. Due to the volatility of the market, equity savings funds can deliver negative returns in some years or over shorter terms.
Factors to Consider Before Investing in Equity Savings Funds
Before considering investment in equity savings schemes, you should consider the following:
- Risk Exposure: Equity savings funds are not completely risk-free. These carry some element of risk due to the equity exposure. While the risk may be lower than equity funds, it is best to be cautious and explore portfolio rebalancing to minimise the risk exposure.
- No Guaranteed Returns: Equity savings funds do not offer guaranteed returns and are subject to various market factors.
- Costs: These funds frequently impose an expense ratio—also known as a management fee—for fund management. To increase the possibility of greater returns, it is crucial for investors to evaluate the expense ratio of funds.
Who Should Invest in Equity Savings Fund?
Equity savings funds are typically suitable for a specific category of investors who have certain financial goals, risk profiles, and preferences.
- Medium-Term Investment Horizon: The equity savings funds can be suitable for investors with a medium-term investment horizon. These funds are not a suitable choice for those having long-term goals or short-term liquidity needs, as these are not short-term options.
- Moderate Risk Tolerance: If you are an investor with a moderate risk appetite, then equity savings schemes can be a good fit for your portfolio. These funds possess the potential for higher returns compared to traditional fixed-income investments in exchange for a moderate level of risk.
- Tax Benefits: Equity savings schemes provide tax benefits to investors, especially related to long-term capital gains taxation. You can consider equity savings mutual funds if you are looking for tax-efficient investment options.
Taxability of Equity Savings Funds
For the purpose of taxation, equity savings mutual funds are treated as equity assets. You will have zero tax liability if the long-term capital gains (holding period of more than 12 months) from equity assets and stocks are below ₹1 lakh. However, the equity savings scheme will be subject to a tax of 10% if the returns are over ₹1 lakh. The short-term capital gains (holding period less than 12 months) are taxable at 15%. As a result, equity savings schemes are a more tax-efficient option than pure debt funds.
How to Invest in Equity Savings Funds?
Investing in Equity Savings Mutual Funds through your Angel One account is a streamlined process that involves a few simple steps: Step 1: Begin by logging in to your Angel One account using your registered mobile number. After logging in, validate the OTP (One-Time Password) for security purposes, and then enter your MPIN to access your account. Please note that if you don't have a Demat account with Angel One, you can open one quickly by completing the KYC (Know Your Customer) procedure and submitting the necessary documents. Step 2: Once you've successfully logged in, it's time to choose the most suitable mutual fund based on your financial needs and risk profile. You can evaluate various funds by navigating to the mutual fund section on the Angel One app. During this stage, consider the following factors:
- Search for the specific fund you wish to invest in or take recommendations from funds listed by Angel One across different categories.
- Analyse the fund's historical performance, tax implications, constituent sectors, and the stocks it comprises.
- Utilise the calculator to estimate potential returns.
- Assess the level of risk associated with the fund and compare it to your risk tolerance.
- Check the fund's ratings assigned by reputable rating agencies, typically on a scale from 1 to 5.
- Take note of the fund's expense ratio, which provides insight into the cost of investing in it.
Step 3: After finalising the fund(s) you want to invest in, navigate to your Angel One account's Mutual Funds section and search for your chosen fund. Since investing in mutual funds often involves a long-term commitment, exercise caution when selecting the fund(s) you intend to invest in. During this stage, consider the following:
- Decide whether you want to invest a lump sum amount or set up a monthly Systematic Investment Plan (SIP).
- Enter the investment amount you are comfortable with and choose your preferred payment method. UPI is the recommended mode, but you can also opt for net banking.
- After placing your order, if you've chosen the SIP investment route, you can establish a mandate for hassle-free future instalments.
Top 10 Equity Savings Mutual Funds to Invest in
| Name | AUM (₹ Crore) | CAGR 3Y (%) | 1Y Returns (%) | Expense Ratio |
| HSBC Equity Savings Fund | 785.83 | 14.69 | 9.86 | 0.67 |
| Sundaram Equity Savings Fund | 1,206.72 | 13.23 | 8.18 | 0.71 |
| Mirae Asset Equity Savings Fund | 1,865.39 | 12.59 | 9.83 | 0.37 |
| Edelweiss Equity Savings Fund | 1,194.87 | 12.46 | 9.19 | 0.61 |
| Kotak Equity Savings Fund | 9,650.52 | 12.35 | 9.08 | 0.69 |
| Mahindra Manulife Equity Savings Fund | 566.91 | 12.24 | 9.42 | 0.7 |
| SBI Equity Savings Fund | 5,918.68 | 12.19 | 7.82 | 0.96 |
| Invesco India Equity Savings Fund | 393.75 | 12.15 | 3.49 | 0.76 |
| UTI Equity Savings Fund | 819.99 | 11.95 | 8.84 | 0.66 |
| Axis Equity Savings Fund | 926.78 | 11.55 | 6.92 | 1.06 |
Note: The data is as of February 2026, with funds ranked by the highest 3-year CAGR among Equity Savings fund schemes.
HSBC Equity Savings Fund
The HSBC Equity Savings Fund is an open‑ended hybrid equity savings scheme that aims to generate income through arbitrage opportunities and long‑term capital appreciation via selective unhedged equity exposure. It invests across equity, derivatives, and debt instruments to maintain tax efficiency and lower volatility.
Managed by Mahesh A. Chhabria, Praveen Ayathan, Cheenu Gupta, and Asif Rizwi, the fund is benchmarked against the NIFTY Equity Savings TRI. An exit load of 1% is levied for units exceeding 0.50% of the investment if redeemed within 1 month.
Sundaram Equity Savings Fund
The Sundaram Equity Savings Fund is an open‑ended equity savings scheme designed to offer stable, tax‑efficient returns by blending unhedged equity, hedged arbitrage positions, and fixed‑income instruments. Its objective is to provide long‑term capital appreciation with moderated risk through diversified allocation.
Managed by Rohit Seksaria, Clyton Richard Fernandes, and Dwijendra Srivastava, the fund is benchmarked against the NIFTY Equity Savings TRI. An exit load of 0.5% applies if redeemed within 7 days.
Mirae Asset Equity Savings Fund
The Mirae Asset Equity Savings Fund is an open‑ended hybrid scheme that combines unhedged equity, equity‑arbitrage strategies, and debt instruments to deliver balanced, long‑term capital appreciation. Its allocation shifts in response to market valuations, aiming for smoother, risk‑adjusted returns.
Managed by Harshad Borawake, Bharti Sawant, Basant Bafna, and Vrijesh Kasera, the fund is benchmarked against the NIFTY Equity Savings TRI. An exit load of 1% is charged for units exceeding 15% of the investment if redeemed within 90 days.
Edelweiss Equity Savings Fund
The Edelweiss Equity Savings Fund is an open‑ended equity savings scheme aiming to provide “debt‑plus” returns with lower volatility by allocating across hedged equity, limited unhedged equity, and high‑quality debt. Its strategy focuses on tax‑efficient income generation with controlled market exposure.
Managed by Kedar Karnik, Bhavesh Jain, Bharat Lahoti, and Rahul Dedhia, the fund is benchmarked against the NIFTY Equity Savings TRI. An exit load of 0.25% applies if redeemed within 30 days.
Kotak Equity Savings Fund
The Kotak Equity Savings Fund is an open‑ended equity savings scheme investing in equity, derivatives for arbitrage, and debt to generate income while delivering long‑term appreciation through controlled unhedged equity exposure. The strategy is built to lower volatility across market cycles.
Managed by Devender Singhal, Abhishek Bisen, and Hiten Shah, the fund is benchmarked against the NIFTY Equity Savings TRI. An exit load of 1% is levied for units exceeding 8% of the investment if redeemed within 90 days.
Mahindra Manulife Equity Savings Fund
The Mahindra Manulife Equity Savings Fund is an open‑ended hybrid equity savings scheme that allocates to unhedged equity, hedged arbitrage, and debt instruments to offer stable, moderate long‑term appreciation. Its approach focuses on balancing growth potential with steady income.
Managed by Krishna V. Cheemalapati, Deepak Gupta, and Amey Sathe, the fund is benchmarked against the NIFTY Equity Savings TRI. An exit load of 1% applies for units exceeding 10% of the investment if redeemed within 15 days.
SBI Equity Savings Fund
The SBI Equity Savings Fund is an open‑ended equity savings scheme that blends equity, arbitrage, and fixed‑income instruments to generate income with moderated market risk. Its objective is to achieve long‑term capital appreciation through a strategic mix of hedged and unhedged equity exposure.
Managed by Nidhi Chawla, Neeraj Kumar, Mohit Jain, and Vandna Soni, the fund is benchmarked against the NIFTY Equity Savings TRI. An exit load of 0.10% is levied if redeemed within 15 days.
Invesco India Equity Savings Fund
The Invesco India Equity Savings Fund is an open‑ended equity savings scheme combining unhedged equity, arbitrage opportunities, and debt instruments for tax‑efficient, stable returns. It aims to provide income through hedged strategies while capturing selective equity‑market upside.
Managed by Deepak Gupta, Krishna Cheemalapati, and Amey Sathe, the fund is benchmarked against the NIFTY Equity Savings TRI. An exit load of 0.25% applies if redeemed within 1 month.
UTI Equity Savings Fund
The UTI Equity Savings Fund is an open‑ended equity savings scheme investing across equity, derivative‑based arbitrage, and debt to provide balanced long‑term returns. Its objective is to deliver capital appreciation and income with reduced volatility across market cycles.
Managed by V. Srivatsa and Sunil Patil, the fund is benchmarked against the CRISIL Equity Savings Index. An exit load of 1% is levied if redeemed within 30 days.
Axis Equity Savings Fund
The Axis Equity Savings Fund is an open‑ended equity savings scheme combining equity, arbitrage strategies, and fixed‑income instruments to deliver tax‑efficient, low‑volatility returns. Its objective is to provide long‑term capital appreciation through a calibrated balance of hedged and unhedged equity exposure.
Managed by Devang Shah, Hardik Shah, and Mayank Hyanki, the fund is benchmarked against the NIFTY Equity Savings TRI. An exit load of 1% is charged for units exceeding 10% of the investment if redeemed within 1 month.
