Types of Hybrid Mutual Funds in India

The different types of hybrid mutual funds in India and their investment mandates are as follows:

• Aggressive Hybrid Fund: This type of hybrid fund invests in both equity and debt instruments, with a higher allocation towards equity (65% – 80%) and a lower allocation towards debt (35% – 20%). The objective is to provide investors with a balance of growth and income.

• Balanced Hybrid Fund: As the name suggests, this type of hybrid fund maintains a balanced portfolio with a mix of equity (40% – 60%) and debt (60% – 40%) instruments. No arbitrage is allowed in this type of fund.

• Conservative Hybrid Fund: This type of hybrid fund invests more in debt instruments (90% – 75%) than equity (10% – 25%). The objective is to provide investors with a stable income stream while preserving capital.

• Dynamic Asset Allocation Fund: This type of hybrid fund has the flexibility to change the allocation between equity and debt instruments dynamically based on market conditions. The objective is to optimize returns while managing risk.

• Arbitrage Hybrid Fund: This type of hybrid fund follows an arbitrage strategy, where the fund manager takes advantage of price differentials between different markets or securities. The minimum allocation to equity is 65%.

• Equity Savings Hybrid Fund: This type of hybrid fund invests primarily in equity (minimum 65%) and a small portion in debt (10%). The objective is to generate capital appreciation while providing some income through debt instruments.