If you are afraid of the stock market, choose hybrid mutual funds, you will get great returns at low risk
Stock markets The recent instability has scared many investors. Many demat accounts were closed. Mutual funds led to massive withdrawal. In such a situation, if you are also afraid of the market, then you can turn to a hybrid mutual fund. Let us tell you that hybrid invests in mutual funds, equity and date securities. Due to this, the risk is reduced. These funds help to create a portfolio that maintains a balance between risks and returns.
Investors are also getting attracted towards hybrid mutual funds due to record height in gold. The data from the Association of Mutual Funds in India (AMFI) suggests that investors’ interest in Hybrid Mutual Fund in April increased. The category made a net investment of Rs 14,247.55 crore, while in March there was a net withdrawal of Rs 946.56 crore.
Investment in equity, date, gold and real estate
Market experts credits the increase in the market more uncertain conditions. There are new signs of increase in Russia-Ukraine conflict and there is ambiguity by the US administration about tariffs. These factors can potentially cause volatility that creates psychological fear among investors, making them out of the markets. Hybrid funds prove to be a good investment in such circumstances. The reason for this is that hybrid mutual funds invest in combination with other asset classes like equity, date, gold and real estate. The investment between these assets varies depending on the type of hybrid fund. Since hybrid funds mix two or more asset classes into a portfolio, they try to capitalize on growth opportunities, reducing the impact of market reforms.
If we look at the recent performance of hybrid funds, the reason for investors’ interest is clear. Balanced Advantage Fund of Nippon India has given 13.55% returns in the last three years, while Nippon India Multi Asset Allocation Fund has given 17.99% returns in the same period. This fund also invests in commodities like gold and silver. Kotak Mutual Fund, ICICI Prudential and Hybrid Fund of SBI Mutual Fund have also given more than ten percent returns during the same period. Since these funds also invest in gold, the recent increase in gold prices has helped in the performance of hybrid mutual funds.
Hybrid Fund is a good investment option
Hybrid mutual funds perform better than extensive indexes, as their portfolio is hedge, and a mixture of assets and allocation is suitable between other assets such as equity, date and gold and silver. Hybrid funds adjust their equity and date exposure depending on valuations and other market indicators. Experts believe that this dynamic approach helps reduce negative risk, which is why investors prefer hybrid funds. Hybrid funds are a good investment option as they serve as “all-viser” options for all categories of investors.
Disclaimer: This article has been written only for the purpose of information. Before any type of investment or before taking financial risks, consult your financial advisor. India TV will not be responsible for any type of risk.
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