Hybrid Funds For Wealth Creation

Hybrid funds are a lethal combination of equity and debt funds. However, it is usually difficult for a first-time investor to select the best fund among the many accessible possibilities. Henil Shah sheds some light on the hybrid fund category in this story and advises first-time investors in picking the correct hybrid fund

- Henil Shah

Investing is one of the strategies that may help you reach your financial objectives in life. Many people, however, continue to rely on conventional saving methods such as bank fixed deposits (FDs), traditional life insurance plans and government schemes. People frequently use the terms 'savings' and investment interchangeably. But they must recognize that there are significant differences between the two. Savings refers to the portion of your income that you set away, whereas investment refers to the portion of your savings that you actually put to work.

Having said that, things have changed in recent years, and with reduced returns given by various saving choices, investors are now shifting their investments to mutual funds. As first-time mutual fund investors, they are confronted with a profusion of alternatives, which frequently leaves them perplexed. In such cases, a hybrid fund is an excellent alternative for first-time mutual fund investors. You may now have a slew of questions about hybrid funds. In this article, we will go over all there is to know about hybrid funds, from what they are to the many types of hybrid funds and how to choose the best hybrid fund.

If we closely track the assets under management (AUM) trajectory of hybrid funds, we can find that it has increased from ₹3,41,445 crore to ₹4,79,918 crore in the last three fiscal years, representing a compounded annual growth rate (CAGR) of 12 per cent.

However, the picture changes if we look at its AUM as a percentage of the overall AUM of open-ended schemes.