What are Hibrid Funds

 What are Hybrid Funds?

They are the funds, that invest in more than one asset class. These are typically a combination of Equity and debt and commodities at times.
What is the benefit?
The benefit is that the investors buy a single fund instead of 2 funds or multiple funds
What are the types of Funds under Hybrid Funds
1) Conservative Allocation or Balanced Funds: These funds maintain a balanced mix of stocks and bonds, often with a higher allocation towards bonds (typically 60-70%) and the remainder in stocks. They aim to provide a blend of growth and income while managing risk.
2) Moderate Allocation or Moderate Allocation Funds: These funds strike a balance between growth and income by maintaining a relatively equal mix of stocks and bonds, usually in a 50-50 ratio. They aim to offer moderate returns with moderate risk.
3) Aggressive Allocation or Growth & Income Funds: These funds have a higher allocation towards stocks (about 70-85%) and a smaller portion in bonds or other fixed-income securities. They target higher growth potential but come with higher volatility and risk.
4) Dynamic Allocation or Asset Allocation Funds: These funds have a flexible investment strategy, allowing the fund manager to adjust the allocation between asset classes (stocks, bonds, cash) based on market conditions. The allocation can vary based on the manager's assessment of market opportunities.
5)Target-Date Funds: These funds are designed for retirement planning and have a specific target date (such as the year of retirement) in their name. They automatically adjust their asset allocation, becoming more conservative as the target date approaches. For instance, a 2050 target-date fund would start with a more aggressive mix of assets and gradually shift to a more conservative allocation as the year 2050 approaches.
Each type of hybrid fund caters to different risk appetites, investment goals, and time horizons, offering investors a diversified approach to their portfolios while aiming to optimize returns based on the fund's strategy.
For personalised planning do connect with us.

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