An open-ended hybrid scheme investing predominantly in equity and equity related instruments.

Scheme Details of Invesco India Equity Bond Fund

Investment Objective of Invesco India Equity Bond Fund*

To generate capital appreciation and current income by investing in equity & equity related instruments as well as debt securities.

However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved. The Scheme does not guarantee or assure any returns.

*Source: Scheme Information Document

(Read: What You Should Read In A Scheme Information Document)

Is Invesco India Equity Bond Fund for you?

Invesco India Equity Bond Fund is an aggressive hybrid fund which invests 65% - 80% of its net assets into equity and equity related instruments. And being an aggressive hybrid fund it will have debt exposure of around 20% - 35% of its net assets.

As per SEBI's new categorisation, Aggressive Hybrid Funds (earlier known as balanced fund) are equity-oriented hybrid funds having a mix of equity and debt instruments in their investment portfolio. A combination of these asset classes offers a high level of diversification, hence, lowering the risk as compared to a pure equity fund.

The equity assets in this category of funds will range between 65% - 80% of its total assets, while debt instruments will have an exposure of 20% - 35% in the portfolio.

This fund is suitable for investors with moderate risk appetite and an investment time horizon of 5 years. Hybrid funds as a category have generated decent returns across time periods. 

Moreover hybrid funds provide the benefit of diversification within each asset classes i.e. equity and debt. So, within equity you benefit from wide diversification across stocks and sectors, while in debt, across fixed instruments and maturity of papers.

And, the hybrid nature of the product allows the fund manager to increase exposure towards debt investments when outlook appears favourable to do the same, thereby facilitating in mitigating the risk (associated with equities) and rewarding investors with appealing returns.

Asset Allocation of Invesco India Equity Bond Fund

The asset allocation of Invesco India Equity Bond Fund under normal circumstances will be as under:

Instruments	Indicative allocations (% of total assets)		Risk Profile High/Medium/Low
	Minimum	Maximum
Equity & Equity Related Instruments$	65	80	High
Units of Liquid/Money Market Mutual Fund schemes, Money Market Instruments (with maturity not exceeding 91 days) including CBLO, Cash & cash equivalent	20	35	Low to Medium

$ Includes equity derivatives i.e. stock futures, stock options etc.
* Debt includes Government Securities

Further it is stated in the offer document that:

• Maximum exposure to the derivatives shall not exceed 50% of the Net assets of the Scheme
• Debt instruments may include securitized debt upto 35% of the net assets
• The exposure to foreign securities ADRs/GDRs shall not exceed 50% of the net assets of the Scheme
• The Scheme may engage in short selling of securities
• The Scheme shall not deploy more than 50% of its net assets in securities lending
• The Scheme may enter into repos/reverse repos, other than repo in corporate debt securities

(Source: Scheme Information Document)

Investment Strategy Of Invesco India Equity Bond Fund

Being an open-ended hybrid fund Invesco India Equity Bond Fund will invest in both equity and debt instruments.

The scheme’s investment in equity will be directed towards generating capital appreciation, while investments in debt securities will provide stable returns thereby reducing the volatility of the portfolio.

The fund is mandated to have an exposure of 65% -80% of its net assets into equity and equity related instruments. Hence, it will tactically take advantage of opportunities by exploiting the price differential between cash and derivatives markets. It will adopt a combination of bottom-up and top-down approach to select stocks.

Further, the scheme is also mandated to invest around 20% - 35% into debt and money market instruments. It will follow top-down approach keeping interest rates view and yield curve movements.

Fund Managers for Invesco India Equity Bond Fund

Invesco India Equity Bond Fund will be managed by Mr Taher Badshah, Mr Amit Ganatra and Mr Krishna Cheemalapati.

Mr Taher Badshah has more than 23 years of experience in the Financial Service Industry. He is a BE (Electronics) and MMS (Finance) from Mumbai University. Prior to joining Invesco Asset Management Pvt. Ltd. he was associated with Motilal Oswal Asset Management Company Ltd., Kotak Mahindra and ICICI Prudential AMC.

Mr Taher is sole fund manager for Invesco India Dynamic Equity Fund. Besides he is c-fund manager for Invesco India Contra Fund and Invesco India Growth Opportunities Fund with Mr Amit Ganatra. And he is co-fund manager for Invesco India Midcap Fund and Invesco India Multicap Fund along with Mr Pranav Gokhale.

Mr Amit Ganatra is a B. Com, Chartered Accountant and CFA. He has over 15 years of experience in Indian equity market. He has been associated with Invesco India since 2007. Prior to joining Invesco, he has been associated with DBS Cholamandalam AMC Pvt. Ltd., Fidelity India AMC and Centre For Monitoring Indian Economy.

Other funds managed by Mr Ganatra are Invesco India PSU Equity Fund, Invesco India Financial Services Fund, Invesco India Largecap Fund and Invesco India Tax Plan

Mr Krishna Cheemalapati is a B.E. (Electronics), PGDBA and CFA from ICFAI Hyderabad. He has more than 20 years of experience in Fixed Income Market. Mr Cheemalapati has worked in the past with organisations like Reliance General Insurance Company Ltd. and ICAP India Pvt. Ltd.

Other funds managed by him are Invesco India Liquid Fund and Invesco India Treasury Advantage Fund.

Fund Outlook of Invesco India Equity Bond Fund

Over the past few months, the equity markets have come off its all-time highs. But as valuations continue to remain high, the market is struggling to regain its past glory. The debt market too, lacks a sense of direction, given the indecisiveness behind the government's borrowing plan and risk in the form of rising prices.

Given this scenario, Aggressive Hybrid Funds (earlier known as Balanced Funds) can provide some stability to your portfolio. These funds, as an investment avenue, could be more suitable now —especially for investors with a moderate-to-high risk appetite.

[Read: Why You Should Be Careful About Investing In NFOs]

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