Equity savings funds returned 3.89% in a year to September

The middle of the road

In the year to Friday 18 September 2026, the median equity savings fund returned 3.89%. Over the same year the median conservative hybrid fund returned 2.86% and the median arbitrage fund 6.79%.

An equity savings fund mixes three things: shares held outright, shares hedged with futures in the arbitrage trade, and bonds. SEBI requires at least 65% in equity, counting the hedged part, and at least 10% in debt. Because of the 65%, it is taxed as an equity fund. The unhedged equity is usually a small slice, which is what puts the category somewhere between an arbitrage fund and a hybrid.

All figures come from daily NAVs dated 18 September 2026, Direct plan, Growth option: 23 equity savings funds, 17 conservative hybrid funds and 33 arbitrage funds with a year of history. Liquid fund figures are as of 20 September.

Four categories side by side

Over the past year, a year in which the Nifty 50 price index fell 8.17%, the open equity in these funds cost them. The median equity savings fund trailed the liquid median by 2.60 points and the arbitrage median by 2.90. Only 3 of the 23 beat the arbitrage median.

Over three and five years the order reverses, and equity savings funds lead all four categories. They did it with more than four times an arbitrage fund's volatility.

Against conservative hybrids, which hold 10% to 25% in equity and the rest in bonds, equity savings funds come out ahead on every return line. 17 of the 23 beat the conservative hybrid median over the year.

2026 in two halves

In the fall to 30 March, the median equity savings fund lost 3.30%, under a quarter of the Nifty 50's fall. In the months since, it gained 6.12%, more than the Nifty 50 but well short of the broader Nifty 500. With bonds also rising since March, both legs helped.

Arbitrage funds never had a down half, and are still ahead for the year.

The last month

The past month was poor for both stocks and bonds. The Nifty 50 fell 3.35% from 18 August to 18 September, and NSE's composite G-sec index lost 1.06%, including interest.

21 of the 23 equity savings funds lost money over the month, but the median lost 0.43%, less than the conservative hybrid median's 0.75%. All 17 conservative hybrid funds were negative. A conservative hybrid holds mostly bonds and some open equity, so it took both hits. An equity savings fund's hedged leg should have earned roughly what arbitrage funds did, 0.61% for the month, which cushioned the rest.

A wide category

Volatility runs from 2.32% to 7.23%, which says the funds take very different amounts of open equity. HSBC's fund, the most volatile, had a worst fall of 11.53% over three years, a hybrid fund's drawdown under an equity savings label. Invesco's is the only one negative over the year.

What this does not tell you

The category label hides the equity dial. Two equity savings funds can differ by several times in open equity. Volatility is the best clue in these numbers.

Past returns don't predict. A year of falling equity made arbitrage look better; a rising year would favour the equity savings funds.

Tax treatment differs. Equity savings funds are taxed as equity funds because of the 65% rule; a conservative hybrid, which holds mostly debt, is generally taxed like a debt fund. The capital gains tax calculator works through a case.

Where to go from here

The equity savings, conservative hybrid and arbitrage pages list every scheme. The guide to hybrid and balanced advantage funds explains the hybrid family.

For arbitrage funds earlier this year, see arbitrage fund returns to March.