Hybrid Mutual Fund: Share Market graph has been unstable in recent days. Some renowned companies find themselves in a surprising downfall. So, investors who invested in mutual funds also worried about the ups and downs of the market. People are looking for some more safer options. In this case, a hybrid mutual fund can be a good and relatively safer option to invest in.
What is a hybrid mutual fund?
The phenomenal growth in hybrid mutual funds depends on the nature of every fund. Hybrid funds invest in two or more asset classes, which usually include commodities such as gold and silver, apart from mainly equity and debt. These funds offer diversification and asset allocation to balance risk and returns. Hybrid mutual funds essentially strive to offer the best returns from multiple asset classes in a single product. When the markets are at an all-high, equity in the fund gives good returns, while debt provides stability. These funds help in achieving better returns in the long run through equities, short-term stability, and regular income through debt. Hybrid funds offer several benefits. These include an increase in capital, as equity increases wealth. Investors also benefit from low volatility due to the debt portion of the fund.
Hybrid funds give diversification to your investments, which is a significant benefit. These funds not only diversify into different asset classes but also sub-classes such as large-cap, mid-cap, and small-cap stocks. Hybrid funds also offer active rebalancing, helping fund managers adjust portfolios in response to emerging market conditions to optimise returns for investors.
Some funds have given attractive returns in the last year. Nippon India has got 35.82% returns; Nippon India BAF has got 25.75% returns. Fund houses like ICICI Prudential, SBI, Kotak Mutual Fund, and Aditya Birla also offer several hybrid funds.
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