Hybrid MF
mutual funds

Best Best Hybrid Mutual Funds in India to invest in 2024

Hybrid mutual funds blend stocks and bonds, offering a balanced approach to investing. They’re suitable for investors seeking diversification with a mix of growth and income. The combination of investment depends on the investment objective of each fund. Anyone can invest, but it’s crucial to consider factors like risk tolerance, investment goals, and time horizon. Hybrid Funds are perfect for those who have average risk tolerance. Top performing Hybrid Mutual Funds in 2024
Fund Name Rating 1Y returns 3Y returns Fund Value in crores
Quant Multi Asset Fund 5 38.37 32.77% 1455.03
Quant Absolute Fund 5 45.28 25.06 1677.35
ICICI Prudential Equity & Debt Fund 5 35.71 25.17 29816
HDFC Balanced Advantage Fund 5 38.14% 24.98% 73348.57
Edelweiss Aggressive Hybrid Fund 5 29.17% 16.53% 1169.89
Kotak Debt Hybrid Fund 5 16.74% 10.73% 2188.53
SBI Conservative Hybrid Fund 5 13.81% 10.10% 9481.25
ICICI Prudential Equity Savings Fund 5 10.64% 8.34% 8322.26
Invesco India Arbitrage Fund 5 7.61% 5.58% 11885.18
Edelweiss Arbitrage Fund 5 7.55% 6.08% 7991.64

Who should invest in Hybrid Mutual Funds?

Hybrid mutual funds can be suitable for a wide range of investors, including:

Conservative Investors: Investors who take the balanced route to get market exposure and income generation

Moderate Investors: Individuals looking to diversify their portfolio without taking big risks.

Retirement Savers: People who are planning for retirement that wants a mix of growth and stability in their investment

Young Professionals: Those with a long investment horizon who want exposure to both stocks and bonds but may not have the time or expertise to manage individual securities.

Income Seekers: Investors who desire regular income alongside potential capital appreciation.

Risk-Averse Investors: Individuals who prefer a less volatile investment option compared to investing solely in stocks

Factors to consider while investing in Hybrid Funds

Before investing in Hybrid Mutual Funds, you should consider the following factors:

  • Returns – The funds do not come with guaranteed returns. The returns from the fund are largely dependent on the performance of equity part of the underlying assets.
  • Investment horizon – Generally, Hybrid Mutual Funds perform on an average of medium-time horizon (3 to 5 years). The longer you stay invested, the more time you allow your fund to perform
  • Risks – The risk part is the allocation to equity holdings. As you would know, equity holdings is subject to market movement, such funds with major equity always have an element of risk associated with it
  • Strategy of investment – While choosing the fund, it is essential to be aware of the combination of the assets chosen, the proportion in every asset, and strategy of investment which are decided by the fund manager. Investors do not have any control over it
  • Expense Ratio – Hybrid funds also come with a fee known as expense ratio. The lower the expense ratio, the lesser it will eat up from your investment
Things to keep in mind while Investing with Hybrid Mutual Funds

Risk Profile: Understand your risk tolerance as hybrid funds blend different asset classes like stocks and bonds, which can vary in risk.

Investment Goals: Be clear of your financial objectives, whether it’s capital growth, regular income, or a mixture of both. Choose a fund that matches your goals.

Fund Manager’s Track Record: Research the fund manager’s past performance and investment strategy. Choose the one who performed the best in all market conditions

Expense Ratio: Consider the fund’s expense ratio, which affects your overall returns. Lower expense ratios can enhance your long-term gains.

Asset Allocation: Evaluate the fund’s asset is diversified. A well-diversified portfolio can help mitigate volatility and optimize returns

Risks involved in investing in Hybrid Mutual Funds

Market Volatility: Hybrid funds are susceptible to market fluctuations, potentially impacting returns, especially in volatile market conditions.

Asset Allocation Risks: The mix of equity and debt securities exposes investors to the risks associated with both asset classes, including equity market volatility and interest rate changes affecting debt instruments.

Managerial Discretion: Fund managers’ decisions on asset allocation may not always align with investors’ risk tolerance or market conditions, leading to potential underperformance or unexpected portfolio shifts.

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