SBI Mutual Fund announced the launch of SBI Equity Savings Scheme, an open-ended equity scheme, which has potential to offer three benefits in one fund - income opportunity, growth potential of equity and tax efficiency - as it is classified as an equity fund. Since the fund is classified as an equity fund for tax purposes, any investments/gains in the fund will be treated as per the current tax laws for equity-based funds.
The scheme aims to generate income by investing in arbitrage opportunities in the cash and derivatives segment of the equity market, and capital appreciation through a moderate exposure in equity.
SBI Equity Savings Fund would be a suitable investment proposition for investors looking for some exposure to equity markets for capital appreciation, income with lower volatility from the fixed-income and arbitrage exposure and get tax-efficient returns. The scheme will be at a lower risk level than regular equity-based funds/balanced funds as the limited directional equity exposure (in the range of 20% - 50%) reduces the volatility and ensures disciplined rebalancing.
SBI Equity Savings Fund would have 65%-90 % exposure to Equity and Equity-related instruments including derivatives (out of which the cash-future arbitrage will be in the range of 15% - 70% and net long equity exposure will be in the range of 20% - 30%). Debt and Money Market instruments (including margin for derivatives) will have an indicative allocation of 10%-35% in the normal circumstances.The scheme shall follow an alternate asset allocation on defensive considerations when there are not adequate arbitrage opportunities available in the Derivative and Equity markets. The Scheme Information Document and Key Information Memorandum have more details on the same.
Speaking on the occasion, Dinesh Kumar Khara, MD & CEO, SBI Mutual Fund said, ''We are happy to offer SBI Equity Savings Fund which offers investors a blend of equity, arbitrage and debt in one fund so you get the growth potential of equity, income opportunity from the fixed income portion and tax efficiency in its returns. This fund is suited for investors looking for tax-efficient returns with a lower volatility than regular equity-based funds. ''
