The Different Types of Hybrid Funds

What Are Hybrid Funds?

Hybrid Funds invest in a mix of asset classes such as equity, debt, and gold. The mix is based on the objective of the fund.

Debt Oriented Hybrid Funds

These funds invest in debt securities with a small portion (5 to 30 percent) in equity. 

Monthly Income Plan

These are debt oriented hybrid funds with a goal to issue a monthly dividend. The dividend is not guaranteed though.

Multiple Yield Funds

These have the objective of investing in debt and equity for returns over the medium term.

Capital Protected Schemes

Close-ended funds which are structured for investors to get their principal back. This is generally done by investing in zero-coupon government securities.

Arbitrage Funds

These funds take opposing positions in the same underlying security by buying/selling in different markets. Eg. Buying in cash and selling in Futures to earn the difference.

Conservative Hybrid Fund

Open-ended fund investing in debt securities between 75 and 90% and in equity between 10 and 25%.

Balanced Hybrid Fund

Open-ended fund investing in equity (40 to 60%) and debt (40 to 60%).

Aggressive Hybrid Fund

Open-ended fund investing majorly (65 to 80%) in equity and the rest in debt (20 to 35%).

Balanced Advantage Fund

Open-ended fund with investment in debt and equity that is managed dynamically.

Multi-Asset Allocation Fund

An open-ended fund investing in three or more asset classes with a minimum of 10% in a single asset class.

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