The 5 kinds of MFs that offers balance

Your investment in hybrid mutual funds can become a big success with exposure to the 5 best options we’ve listed in this article.

After years of hard work, you have come to realise one fundamental truth about money: just your income is not enough! You must park your income in suitable investments so that your money can work for you even when you don’t.

But you are wary of making market-linked investments right away. In view of the various market flip flops and an economy that is not performing to the highest potential, you wonder if your investment will tank faster than you can do anything about it! It all depends on which market instrument you choose, and how long your investment horizon is. You can invest in hybrid mutual funds if you seek stability and low risk, while also getting good appreciation on investment.

What are hybrid funds, and how do they work?

As the name suggests, these are mutual funds that offer a hybrid, or a mix of equity and debt. They are also called ‘balanced funds’, because they balance the investment in certain proportions between both equity and debt. They are the perfect investment vehicle for those who are risk-averse and who don’t mind a longer window of vestment. This approach helps them tide over short-term losses when the markets suddenly tank, and to hold steady when the markets rise.

Hybrid mutual funds also offer an easy out for investors who do not wish to pack their portfolios with too many varied funds, which may become difficult to monitor. A hybrid fund is more commensurate with a safe investment strategy that seeks instruments across different asset classes. They invest in bonds, stocks and cash instruments to gain high capital appreciation over a longer time. However, you are free to select the allocation as per your risk appetite, age, time frame for goals, etc. Thus, you can initially go with higher allocation in equities, while switching to debt later to minimise the risk.

The 5 hybrid mutual funds to invest in 2018

Consider investing in the following best performing hybrid mutual funds this year for good returns over time:

  1. Dynamic Equity Fund: An asset allocation fund that shows an average NAV of 10.96 as on July 26, 2018, with a minimum SIP investment of Rs 1,000.
  2. Arbitrage Fund: This is an open-ended scheme that invests in arbitrage opportunities, showing annualised returns of 6.58%. You can invest in it with a minimum SIP amount of Rs 1,000.
  3. Equity Saver Fund: It is an open-ended scheme investing in debt, equity and arbitrage opportunities. It offers annualised returns of 7.12% and you can invest in it for a minimum SIP amount of Rs 1,000.
  4. Regular Saver Fund: It is an open-ended hybrid scheme investing primarily in debt instruments. Thus far, it shows annualised returns of 8.19%. The minimum SIP amount for it is Rs 1,000.
  5. Triple Advantage Fund: This open-ended scheme offers exposure to equity, debt and gold instruments. It offers annualised returns of 8.14%.
The 5 kinds of MFs that offers balance
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