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Hybrid mutual fund schemes

Published: 22nd Feb, 2024

Context

Hybrid mutual fund schemes have been gaining popularity among investors, attracting Rs 20,634 crore in January, marking a 37 per cent surge from the previous month, largely due to their appeal as an alternative investment option post-change in taxation laws for debt funds.

What are Hybrid Funds?

Different types of hybrid funds

  • Aggressive Hybrid
  • Balanced Hybrid
  • Conservative Hybrid
  • Equity Savings Funds
  • Arbitrage Funds
  • Multi Asset Allocation
  • Balanced advantage funds (dynamic allocation)
  • Hybrid funds are a combination of equity and debt features into a single fund.
  • Hybrid funds are mutual fund schemes that typically invest in a combination of equity and debt securities and sometimes in other asset categories such as
  • A hybrid fund tries to give the investor the best of both worlds - it is neither too risky, nor it is too low on returns

Why they are an attractive option?

  • Hybrid funds appeal more to investors with a moderate or low-risk profile.
  • These funds are good investment options as they reduce the volatility associated when participating in equity markets while simultaneously providing stability in the fixed-income market.
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