What are Hybrid Mutual Funds?
Hybrid Mutual Funds are investment funds that combine equities and fixed-income securities in a single portfolio. They aim to balance growth potential and income stability, offering diversification and reducing overall risk. They cater to both conservative and aggressive investors by adjusting the mix of assets.
Features of Hybrid Funds
- Invests in two or more asset classes
- Risk diversification
- Flexible allocation through asset rebalancing
Benefits of investing in Hybrid Funds
- Consistent returns in all market conditions
- Lower risk exposure
- Simplified investment
- Regular income with the bond component
Types of Hybrid Funds
Larger allocation in equities and smaller allocation in debt/bond
Larger allocation in fixed-income securities, such as bonds, and smaller allocation in equities.
Mix of equity and fixed-income investments, ideal for investors seeking a blend of growth and stability
Investments across asset classes, including equities, bonds, commodities, and real estate
Investment reallocation across asset classes as per market conditions and economic forecasts
Maximises returns while minimising risks by leveraging price differences across cash and derivative markets
Investments in a mix of equities, debt, and arbitrage opportunities to provide balanced growth with reduced risk
Who Should Invest in Hybrid Funds?
- Conservative Investors
Conservative Hybrid Funds allocate a higher proportion to fixed-income securities, providing stability and steady income with lower risk exposure.
- Moderate Investors
Balanced Hybrid Funds offer an equal mix of equities and fixed-income securities, aiming to balance risk and reward for moderate growth and income.
- Aggressive Investors
Aggressive Hybrid Funds have a higher allocation to equities. These funds target significant capital appreciation while still incorporating fixed-income securities for some level of risk mitigation.