Know About Hybrid MFs

28 Sep, 2016

There is no denying the fact that the stock market has been the prominent choice of the investors. With the presence of innumerable schemes and policies, the investors find it easy and effective to invest their money here. If you are also thinking of investing your money in the stock market, then you will come across innumerable Mutual Funds. One of the many is Hybrid MFs. Let’s know about it!

What is Hybrid Fund?

A hybrid fund is another variety of mutual funds that is specified by the portfolio created through the amalgamation of stocks and bonds. These stocks and bonds can either diverge proportionally over the period of time or remain intact.

There are a number of Hybrid Funds that serve different purposes for different investors. Have a look at them!

Equity Hybrid Funds-

These funds support more submission to equities than debts. The balance funds come under this category. If you are looking for an ideal long-term investment, then you can invest your money in these funds, but the risk factor is very high in this category. For the novice investors, it is advisable to go for this category since these funds also offer a sort of protection as compared to other different funds.

Debt Hybrid Funds-

You will find a number of varieties in this category, including conservative, moderate, and aggressive funds. The submission to equities and debts vary from category to category. The submission to equity in conservative hybrid fund can be up to 10%, in moderate 20%, and in the aggressive category it can be up to 30%. Due to the variation in submission, the risk in different categories also varies. The Monthly Income Plans fall under the category of Debt Hybrid Funds.


Other than these two, there are some more hybrid funds as well that can surpass your requirements as an investor.

  • Arbitrage Funds-

These funds apprehend arbitrage chances in the derivative market and the cash and then invest a specific part in the debt category. Because of the low volatility and equity taxation, these funds are attracting a number of investors. But, since these are equity funds, so the probability of risk elevates as well.

  • Asset Allocation Funds-

The submission of these funds in equity and debts vary from the classes of the assets. Most of the funds in this category are fund schemes.

A Hybrid fund is the mixture of debts and equities that generate a satisfactory return. But, as an investor,  there are some things that you must keep in mind, like your capability of handling risks and your expectations from the funds. Whether you want to invest your money for a long time or you just need a monthly income depends on the funds you choose. In the end, make your decision after analyzing your requirements.


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