All you need to know about hybrid mutual fund

Professionally mutual funds have a division into three different formats. First, If they want to take a risk in mutual funds, then they easily can invest in equity funds. Second, those who have very well know to invest in debt funds and that assures some returns while keeping money safe. Third, those who want the best of both, by going for this fund.

Let’s check what hybrid fund in detail is. You may have heard of equity funds and debt funds, but there’s another one. If You are not familiar with this hybrid fund. So what are hybrid funds? Like the term suggests. The hybrid fund invests in multiple asset classes to cater to the need for varying levels of risk tolerance

If you want a achieve more in Hybrid funds without taking any risk. Then, you have to invest in Equity Funds. As we compare to debt fund and Equity funds for a good return. Then, debt funds are the best for an investment. The perfect blend of the two offers. Higher returns and regular debt funds. a hybrid fund is not being as risky as equity funds. A hybrid fund is a classification of mutual funds that invests in different types of assets or asset classes. For a produce a diversified portfolio. In other words, which hold typically 60% stocks and 40% bonds are a common example of a hybrid fund. However, the investments are made in a mix of equity and fixed income instruments

How does a Hybrid fund work?

Hybrid mutual funds invest across different asset classes, aiming to minimize risk and establish capital appreciation. Moreover, a well-managed mutual fund scheme (of any kind) aims to generate income in the short term. Also, capital appreciation in the long term. Through a well-planned distribution of the investment corpus across different asset classes

Asset allocation means allocating funds to different classes of assets available in the market i.e. bonds, bills, gold, etc. Diversification of funds is a process in which the asset is chosen is such a manner. To balance the risk and return matching the investment goals.

Who should invest in hybrid mutual funds?

If You are new in mutual funds and you want an invest your money and get the extra return. Then you have to go on with any Hybrid schemes.

New investors:- Those who new in mutual funds, can figure out their risk profile and investor profile by looking through. You have to Study more for a hybrid mutual fund scheme, as these schemes have a little bit of everything. These funds investors have a good opportunity to know more about mutual funds in deeply. So Call them, they don’t love to take you through the process.

Seasoned investors:- Those who have to invest for some time regardless of positive or negative gains. It can also benefit greatly from the right hybrid fund scheme. Knowing one’s risk profile and goals are essential to successful investing. Hybrid schemes lay out their goals and investment mandate in the offer document

Ways to Invest in hybrid funds

The investment can be made in 2 ways, either through a lump-sum investment or SIP.

Lump-sum investment- The entire investment amount is invested at once and returns start flowing thereon.

SIP– The investor invests a fixed amount of his choice at fixed intervals. Here the benefit is that the investor can anytime change the lower or increase the amount of investment. An investor can also change the investment period say from 6 months to say a year or end the investment

Why invest in hybrid mutual funds?

Ideally, you’d invest in hybrid funds if you wish to add a huge amount of portfolio diversification to your existing portfolio. Hybrid fund schemes are also a safe bet for new investors – as they efficiently allocate funds in the right proportion between asset classes and industries – based on the investment mandate and the fund type.

Active risk management, portfolio diversification, and asset allocation are why most people invest in the hybrid mutual fund. 

Top 5 Hybrid Funds in India

While selecting a fund, you need to analyze the fund from various perspectives. Various quantitative and qualitative parameters can tell you which is the best hybrid fund that suits you. Here you have to take care of your invested money and also understood how much money is returns.

  • Mirae Asset Hybrid Equity Fund
  • ICICI Prudential Advisor Series Fund
  • Motilal Oswal Dynamic Fund
  • SBI Hybrid Equity Fund
  • ICICI Prudential Balanced Advantage Fund

Any person who wishes to find a good place to enter the world of mutual funds and investments must check out hybrid mutual funds.