Hybrid Funds

Inflows, folio additions decline for three straight months

Through hybrid mutual funds, investors can not only benefit from the potential market growth but also reduce their risk by investing in debt securities

Hybrid funds provide a structured way to handle market fluctuations

If interest rates decline, the bond component of these portfolios could generate capital gains. Conversely, rising interest rates may cause short-term losses

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Equity savings schemes offer lower-risk hybrid options with tax advantages over most other mutual fund schemes with similar risk profiles

Asset allocation ensures investor gets small exposure to stocks in a predominantly bond portfolio

The fund aims to provide capital growth as well as regular income by predominantly investing in equities, with debt and money market securities making up a smaller pie

The change in debt fund taxation, combined with the desire for diversification and risk management, fuelled investor interest in these balanced investment products

The fund aims to provide capital growth and current income through a portfolio invested predominantly in equities, with a balance in debt and money market securities

New account addition slows to 3-year low despite debt tax change boost

Most believe that debt funds will attract higher flows over the next 12 months as the interest rate trajectory could trend lower throughout the year

Remember these funds have a limited track record currently; they will also not receive equity tax treatment

Hybrid funds are ideal for investors who are looking for a balance between returns and risk. They are suitable for investors who are looking to generate regular income or grow their wealth.

After 360 ONE, Whiteoak launches funds in the less-known category

The new fund offer (NFO) will be open from September 4 to 18, and the minimum application amount is Rs 1000 (and in multiples of Rs 1 thereafter

Aggressive hybrid funds are those that invest maximum 65-80 percent in equities and the rest in debt, whereas Multi Asset Funds allocate their corpus across equity, debt, commodities, REITs

MFs expect hybrid funds to become investor favourites

There are three approaches investors may take as they decide their asset allocations

The fund's investment objective is to generate long-term capital appreciation and current income from a portfolio invested in equity, equity-related securities, and fixed-income securities