As the curtains draw on fiscal year 2023-24, investors across the spectrum are eagerly assessing the performance of their investment portfolios.
While the Nifty50 index flaunts a surge of 30%, mutual fund aficionados are also revelling in substantial gains, particularly those who opted for hybrid mutual funds.
Understanding Hybrid Mutual Funds
Hybrid mutual funds offer investors a blend of both equity and debt instruments, striking a balance between growth and stability. The allocation to equity varies across different categories of hybrid funds, catering to diverse risk appetites.
Conservative Hybrid Funds
Designed for risk-averse investors, conservative hybrid funds typically allocate 10% to 25% of their assets to equity, with the remainder parked in debt instruments. These funds have yielded returns ranging from 14% to 17% over the past year, providing a modest yet reliable source of income.
Aggressive Hybrid Funds
For investors seeking growth opportunities with a moderate level of risk, aggressive hybrid funds allocate a higher proportion, approximately 65% to 80%, to equity. The returns from these funds have been noteworthy, with top performers delivering between 34% to 48%, showcasing the potential for substantial capital appreciation.
Dynamic Asset Allocation Funds
Offering unparalleled flexibility, dynamic asset allocation funds adjust their equity and debt allocations dynamically based on market conditions. Also known as balanced advantage funds, these have displayed commendable returns ranging from 28% to 39%, with HDFC Balanced Advantage Fund leading the pack.
Investors’ returns are contingent upon the type of hybrid fund they choose, reflecting the delicate balance between risk and reward. While conservative funds provide stability with modest returns, aggressive funds offer the potential for higher gains albeit with increased volatility. Dynamic asset allocation funds, with their adaptive strategies, present investors with a middle ground, capitalizing on market opportunities while mitigating risk.
As investors bid adieu to fiscal 2023-24, the performance of hybrid mutual funds stands out. Whether one seeks steady income, robust growth, or a balanced approach, there’s a hybrid fund to suit every investment objective.
