Not all have the aptitude to invest in equity stocks directly. These people rely on debt instruments that earn fixed returns, though not so high as their equity counterparts. The remaining prefer balanced or hybrid mutual funds that combine the best of equity along with the stability of debt fund instruments.
Many investors have different financial goals, out of which some prefer to earn money without feeling perturbed owing to the volatility involved. This explains the constant rise in the number of people parking their money in hybrid mutual funds that allows them the benefit of investment diversification. The inherent risks are high while the returns continue to be moderately high, thus, offering a hedge against inflation.
Some of the best hybrid mutual funds include:
- ICICI Prudential Equity and Debt Fund Direct: Experts deem this aggressive hybrid fund for investing this year. Analysts have rated this as the best mutual fund owing to its previous record of beating the benchmark index continuously. As of now, this fund has yielded 32 per cent returns (by March 2022) to its investors.
- Quant Absolute Fund - Direct: Listed among the best hybrid funds to date, this fund has been rated five stars by Value Research. This fund has returned extremely high returns up to 107 per cent in the past three years. The proportion of equity to debt is a bit on the higher end with the former being invested in bluechip and large-cap companies.
- Kotak Equity Hybrid Fund - Direct: One of the most outstandingly performing mutual funds that investors vouched for in 2022, the returns from this fund are way ahead of those generated by its peer funds. Also, the expense ratio of this fund is the lowest, thus, making it an attractive option for long-term investors.
- SBI Equity Hybrid Fund Growth Direct: The rationale behind investing in this fund is simple. The idea is to garner returns from a fund that is continuously beating the benchmark index. This fund has been rated four stars by Value Research analysts owing to its high returns coupled with its low expense ratio. Compared to most other hybrid funds, this allows much less exposure to equity instruments, thus, offering moderately high returns.
- Canara Robeco Equity Hybrid Fund Growth Direct: Counted among the aggressive hybrid funds to invest in, this fund has gained repute and recognition owing to its exposure to both bluechip and large-cap stocks including those in banking, finance and IT. The expense ratio of this fund is very low, thus, translating to minimal fund management fees.
Hybrid mutual funds are best for those seeking moderate investments sans the hassle of the market’s undulating movement. While selecting among the myriad mutual funds for investment, you must first assess their fund performance before putting your money in them. The quality of fund management also matters, which is why you must first check the fund manager of every portfolio to ensure less participation in risk while earning maximum returns from the market. Check the expense ratio of the fund to make sure that you are not paying hefty charges towards your mutual fund.
Note: This is not an investment advice. Please speak to a registered investment advisor before investing.