Hybrid mutual funds have become a popular choice for investors looking for a mix of steady returns and manageable risk. These funds combine both equity and debt instruments, allowing investors to enjoy the perks of both types of assets.
So, how do hybrid mutual funds operate? There are mainly two categories: aggressive and balanced. In aggressive hybrid funds, 65-80% of the money is allocated to equities, while the remainder is invested in debt instruments. Balanced funds, on the other hand, maintain a more even split between equity and debt, which helps to lower risk.
These funds are perfect for those who want to protect themselves from market fluctuations while still benefiting from equity growth. When the market is thriving, the equity portion can yield great returns, and the debt instruments provide a safety cushion when things take a downturn.
SIP and Top-up Strategy
A smart way to invest in hybrid mutual funds is through a Systematic Investment Plan (SIP). By contributing monthly, investors can lessen the effects of market ups and downs. Plus, if you increase your SIP contribution by 8-10% each year, you could build a substantial fund over time.
Top Hybrid Mutual Funds
Take the SBI Equity Hybrid Fund Direct Plan Growth, for instance. If someone invests Rs 10,000 each month in this fund, they could see their investment grow to Rs 3 crore over 25 years. Hybrid mutual funds are great for those who want to leverage both equity and debt. They not only promise solid returns but also offer a safety net during turbulent times. So, if you’re a savvy investor, consider adding at least one aggressive hybrid fund to your portfolio.
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