Mutual Funds: If you want to invest in mutual funds, then you also have an option of hybrid funds. Hybrid fund is also a type of mutual fund that invests in multiple asset classes within a single fund. Depending on the type of fund, it can be a combination of two or more asset classes. These include equity, debt, gold and international equity in different proportions. There is little or no relationship between these asset classes. There are six sub-categories of hybrid funds. Know about them:-
Aggressive Hybrid Fund
- Consider it only if you can take more risk.
- In this, 65-80 percent of the money is invested in equities (different categories of large-cap, mid-cap and small-cap).
- 20%-35% of the money is invested in fixed income instruments.
- For a period of more than five years this category should be considered.
Conservative Hybrid Fund
- 10-25% of the money is invested in equities.
- The rest of the money is invested in debt instruments.
- Debt instruments include corporate and government bonds and non-convertible debentures.
- Debt investment is done to earn regular and steady income.
- Equity portfolio has the potential to generate better returns.
Dynamic Asset Allocation Fund
- They increase/decrease the allocation between equity and fixed income based on certain pre-determined valuation parameters.
- This fund maintains a balance between equity and fixed income instruments as compared to pure equity funds depending on the market conditions.
- These funds take advantage of the price differential of stocks on different exchanges or between two different markets (cash and derivatives markets).
- With the advantage of equity taxation, an arbitrage fund can be an investor’s choice to invest short term surplus liquidity and generate good returns.
Multi Asset Allocation Fund
- The fund invests in at least three different assets with a minimum investment of 10% in each.
Equity Savings Fund
- This fund is a perfect mix of Equity, Debt and Arbitrage. An equity savings fund offers a great option by allocating a minimum of 65% in equity and arbitrage positions and the balance in fixed income instruments.
(Investment advice in any fund is not being given by ABP News here. The information given here is for informational purposes only. Mutual fund investments are subject to market risk, read all scheme documents carefully. The NAV can fluctuate depending on the factors and forces influencing the security market including the fluctuations in interest rates.The past performance of a mutual fund may not necessarily reflect the future performance of the schemes. The mutual fund does not guarantee or guarantee any dividend under any of the schemes and is subject to the availability and adequacy of distributable surplus. Investors are advised to review the prospectus carefully and seek specific legal, tax and scheme You are requested to seek expert professional advice regarding the financial implications of investing/participating in
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