
Hybrid Funds
Hybrid Funds
Equity funds are investments made on private companies. They further invest the borrowed money in the firm capital for profits. From the profits they give back dividends to the investors.
Debt funds consist of loans given to private and government firms. The borrowers return the principal after a promised amount of maturity period. In-between they also provide regular interest for the amount borrowed.
Who should you buy Hybrid funds?
As discussed, above hybrid funds are further classified for different risk profiles which differ in terms of market risk and returns. Investors has to choose accordingly.
Aggressive funds consist more of equity and has high possibility of gaining high returns at the same time have high risk factor.
Conservative funds consist more of debt and has high possibility of safe and fixed returns. These funds are volatile like other hybrid funds.
Facts to be considered
Sector
Investing in private and public sector are two different things with unique performances. The private sector is always knowns for higher returns and higher risks. Whereas in government sector the returns are comparatively low but they are safely backed by the government.
Nature of fund
As described above decided the equity debt fund ratio is the first thing a investor has to do before investing in hybrid fund. As each fund is unique it’s advisable for the investor to know the portfolio ratio before investing.
Past performance
Past performance is a considerable factor before choosing any fund. A fund should have a stable return. Also note that having both gains and few loses is not a bad sign. The investor has to analyse such things before investing.
Portfolio
Even though the equity debt fund ratio is decided it’s vital to know where the money is to be invested. It’s up to the investor to go with a particular fund and its portfolio. The investor has to analyse the fund portfolio before investing.