Balanced advantage funds vs Equity savings funds: Which is better?

A cursory glance would have you believe that balanced advantage funds and equity savings funds are the spitting image of each other. They are both hybrid funds (they put money in both equity and debt); they invest in arbitrage opportunities (what's arbitrage?); and they can both enjoy equity-like tax benefits. However, dig deep, and you'll observe the following differences: 1. Equity-debt asset allocation mandate Although both invest in equity and debt, balanced advantage funds (also known as dynamic asset allocation funds) are more flexible. They don't have any restrictions on how much equity, debt or arbitrage they can opt for. On the other hand, equity saving funds must have at least 65 per cent of investor money in equities/equity-related (including arbitrage) and 10 per cent in debt. 2. Pure equity exposure Balanced advantage funds (BAFs) usually have a higher and more volatile exposure to pure equity, as can be seen in the graph below. Over the last five years, the category median (read average) exposure to un-hedged equi