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Many investment options are available in India, from fixed deposits, gold, and silver to real estate. In the past few years, investment in the stock market and investment in mutual funds have attracted everyone's attention. There are many funds available for investment in mutual funds. In the past few articles, we have given you information about various mutual funds, like thematic funds and quant funds. In today's article, we are going to get detailed information about hybrid funds or mixed funds.

What is a hybrid fund?

Investment in hybrid funds is spread out rather than being invested in any one instrument. These funds mainly invest in equity and debt assets.

Types of hybrid funds are as follows:

1.Aggressive Hybrid Fund:

This is a hybrid fund that has higher risk and higher returns than other hybrid funds. because 65 to 80% of the investment in this fund is made in equity assets. And the other 20 to 35% of the investment is invested in debt assets. This fund is considered a good one for investors who have a high-risk tolerance.

2.Conservative Hybrid Fund:

This fund is also a hybrid fund. But the special thing is that this fund is the opposite of the Aggressive Hybrid Fund. 65 to 80% of the investment in this fund is made in debt funds. And the other 20 to 35% of the investment is made in equity assets. This fund is a stable and low-risk fund. Due to this the returns in it are less.

3.Balanced Hybrid Fund:

SEBI has included the category of this fund in the Aggressive and Conservative category since 2017. This fund mainly balances both these funds. The investment ratio in this fund is 60-40%.

4.Balance Advantages Fund:

While investing through this fund, more emphasis is given to equity funds. But especially, investment in equity funds is done by looking at the PE ratio. Due to which

It reduces the risk of investing in companies with high valuations. This fund is considered the best fund for investors who want to achieve a balance in the best assets.

5.Multi-Asset Hybrid Fund:

This fund invests in gold or real estate in addition to equity and debt. Gold prices and stock prices often move in opposite directions to each other. This fund often performs well during periods of inflation or economic recession.

6.Arbitrage Fund:

Many times this fund focuses more on short-term than long-term investment. In this, investment is made in undervalued assets, and investment in overvalued assets is withdrawn. These funds also invest a large amount of money in cash and derivative markets. Since buying and selling is done for a very short period of time, it can give stable returns like debt.

7.Equity Saving Fund:

More than 65% of the investment in this fund is invested in equity assets. The uncertainty and risk in this are of a moderate nature.

Advantages of hybrid funds:

1.Diversification:

Risk is taken by investing in various assets.

2.Professional Management:

Hybrid funds are managed by a fund manager.

3.Risk management:

Investment in equity assets is high risk, high return, while investment in debt assets is low risk, low return. Due to which this fund maintains a balance and reduces risk.

Important risks in case of hybrid funds:

1.Market Risk:

Falls in the market affect every mutual fund.

2.Interest Rate Risk:

When interest rates increase, the value of debt assets decreases, due to which this risk is considered an important risk in hybrid funds.

3.Liquidity risk:

Many times, there is difficulty in buying and selling assets due to a lack of liquidity in the market.

Conclusion:

Hybrid mutual funds are good mutual funds that maintain a balance between growth and stability. Through this fund, you can benefit from both the opportunities in equity assets and the stability in debt assets.

FAQ:

1.What is a balanced fund?

Ans: A balanced fund is a type of hybrid fund in which investments are made in equity and debt assets in the ratio of 50-50.

2.What is the difference between aggressive and conservative funds?

Ans: In aggressive funds, more risk is taken to get higher returns. And on the contrary, in conservative funds, both returns and risks are low.

3.Which is the best hybrid fund in India?

Ans: Looking at the returns of the last three years, HDFC Balanced Advantage Fund and Quant Multi Asset Hybrid Fund are the top-performing hybrid funds.

4.How does an arbitrage fund work?

Ans: In this fund, there is multiple buying and selling for a short time. The buying and selling that occurs is based on the difference in the prices.