Enter debt-oriented hybrid funds with a minimum horizon of three years

Invest via the SIP route to benefit from the volatility expected in the near term

Owing to low returns from pure fixed-income instruments, many financial advisers had asked their clients to invest in debt-oriented hybrid funds. Since these funds take some exposure to equities, they are expected to offer slightly higher returns than pure debt funds. Over the past month, however, returns of many funds in these categories have turned negative.

Sliver of equity exposure

Conservative hybrid funds invest 15 to 25 per cent of their portfolio in equities and the rest in bonds. Equity-savings schemes invest in a mix of stocks and spot-futures arbitrage in such a way that these two components together constitute