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Answer transcript: Its a new nomenclature. Different companies configure them differently. However, the basic idea is that they invest a third in equity, a third in arbitrage and a third in fixed income. The risk profile is fixed income but their tax profile is that of equity. These are conservative funds. Think of them as MIPs which are treated as equity funds from a taxation point of view, thus making your long term funds tax-free. Most MIPs don't go beyond 15-18% in equity, but these funds can be 33% in equity. These are low-risk funds and have a relatively low allocation to equity funds.
This article was originally published on April 07, 2017.
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