Hybrid Mutual Funds - A Combination of Capital Appreciation & Stable Income

Mutual funds are one of the best financial instruments to invest for the future. Given that the inflation is increasing at the rate of knots, traditional bank and post office accounts are fast becoming insufficient to generate the corpus that you seek. That’s why the focus must shift to mutual funds that diversify the invested capital across a wide range of equity and debt securities. As MFs are offered in varied types, you could come across different funds. One of them that you could ponder is Hybrid Mutual Funds. The fact that most tend to invest in these funds is because of the fact that they provide a unique combination of capital appreciation and stable income. How do they manage to do so? For that, you must read the article further.

How Do Hybrid Mutual Funds Ensure Capital Appreciation and Stable Income?

Hybrid mutual funds are those funds that invest in both equity and debt instruments in specific proportions to ensure capital appreciation and stable income for the investors. Now, hybrid funds can be both equity and debt-oriented. The equity-oriented funds would invest the maximum corpus in equity and equity securities. These funds would invest a few in debt instruments as well. The style of investment in debt oriented funds would be opposite to that of equity-oriented funds.

Do Hybrid Mutual Fund Investments Make Sense in Today’s Times?

While a bull run of your equity fund investments can lead you to monumental heights, the anticipation of bearish sentiment taking away the sheen from the investments anytime. On the other hand, the debt instruments can ensure regular income generation but not in line with the inflation that could prevail. So to balance out the portfolio, it won’t be bad to choose hybrid mutual funds that are best suited for the job.

What are the Best Hybrid Mutual Funds Doing the Rounds These Days?

While choosing from the hybrid mutual funds to invest, you must look at the performance of these funds over different points of time. The fund that you choose must have emerged strongly through the thick and thin of the market. Based on our research, we have listed out the hybrid mutual funds where you should invest in.

Franklin India Multi Asset Solution Fund

The fund, which was launched on November 28, 2014, has provided a return of 4.50% since then. The 1-year and 3-year returns of the fund are 1.34% and 5.05%, respectively. The minimum lump sum and SIP investment amount needed is ₹5,000 and ₹500, respectively. It invests in equity, debt, gold, etc.

SBI Multi Asset Allocation Fund

The fund made its way into the mutual fund space on Dec 21, 2005, and since then, it has offered a return of 7.42% for the investors. On the other side, it has given a return of -0.22%, 5.64%, 8.52% and 8.56%, respectively. You can invest in this fund by either a lump sum or SIP route. While the minimum investment in lump sum is stipulated to be ₹5,000, the same in the case of SIP is ₹500. The fund has invested the assets in companies across diverse sectors of the economy such as construction, FMCG, healthcare, energy, engineering, etc.

HDFC Dynamic PE Ratio Fund of Funds

Launched on Feb 6, 2012, the fund has provided a return of 8.71% since then. The fund invests in a mix of debt and equity schemes of HDFC Mutual Fund. The fund has delivered 2.94%, 3.46%, 10.88% and 9.11% returns in 1 year, 2 years, 3 years and 5 years, respectively. The minimum lump sum and SIP investment is ₹5,000 and ₹500, respectively.