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NRI

Hybrid Funds

Are you looking to invest in high-risk-high-reward equity and low-risk debt instruments? Now, you can enjoy the best of both worlds with hybrid funds. Hybrid funds are a mixed bag, combination fund, consisting of both equity and debt investments. To make investing in the fund more flexible and accessible, each fund has a different combination of equity and debt suitable for different types of investors. If you want to add a hybrid fund to your portfolio, you can consider the list of the best hybrid funds and invest according to your financial requirements.

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FAQs

Who should invest in a hybrid fund?

While hybrid funds are considered riskier than debt-based instruments, they are also safer than many equity-based investment options. Thus, they provide benefits from both areas including better returns than debt funds and lowered risks as compared to equity investments. Thus, hybrid funds could be a great addition to your portfolio if you want a more balanced investment option, especially if you are a new investor.

The various types of hybrid funds are Equity Savings Funds, Aggressive Hybrid Funds, Dynamic Asset Allocation Funds, Multi Asset Allocation Funds and Arbitrage Funds.

No, you do not need a demat account to invest in hybrid funds. However, it could come in handy to digitally store your mutual fund units and other securities.

Hybrid funds are a type of mutual fund that invests in various asset classes such as equity, commodity, debt, money market instruments, etc. The asset allocation and the investment depends upon the objective of the scheme to generate risk-adjusted returns.

Conservative hybrid funds are low-risk and less volatile schemes that invest most of their capital in debt instruments. It invests around 75-90% of its assets in fixed-income generating securities like Fixed Deposits, Commercial Papers (CPs), Treasury bills, corporate bonds and other money market instruments. The remaining capital is invested in equity and equity-related instruments.