Tue. May 21st, 2024
Invest In Hybrid Funds


The returns you get from equities can easily beat inflation but they carry a great amount of risk. On the other hand, debt funds are quite secure but their returns are somewhere between low and average ranges. But what about investors who want to invest in mutual funds where they can expect low risks and more than decent returns as well. It is, for this reason, understanding hybrid fund meaning becomes relevant.

Hybrid fund meaning goes something like its name: it is an admixture of both equities and debt funds. So what the hybrid funds do is that they primarily invest in two asset classes: equities and debts in varying ratios. It is usually the fund manager who decides what should be the proportion of investment in hybrid funds. But on the general level, it is in a 60:40 ratio where 60% is reserved for equities and 40% for debt funds. However, this ratio keeps changing as per the movement of the market. To know more about the meaning of hybrid funds, click the link given below: https://www.glideinvest.com/knowledge-center/hybrid-funds-guide-meaning-types-how-to-invest

How to Invest in a Hybrid Fund?

Gone are those days when you would have to visit a local mutual fund office to get your investment. In this digital era, everything can take place right from your smartphone and computer and the same can be said about investments. Investing in hybrid funds through this process is quite easy and less time-consuming.

So, if you are planning to invest in hybrid mutual funds, here is how you can do that:

Choose the Hybrid Fund

The first important thing you need to figure out is the type of hybrid fund you want to invest in. There are different categories of hybrid funds available out there and many of them invest in more than two asset classes. It is very important to understand the complete meaning of hybrid funds before investing in any of its types. They are equity-oriented hybrid funds, debt-oriented hybrid funds, balanced funds, and more. You will have to gain some idea about these funds and depending on your objectives, you can choose the one to your liking.

Choose the Fund House

Now, you will need to find the fund house through which you will be investing in hybrid funds. There are numerous fund houses and Asset Management Companies that can be of help to you. One of the ways in which you can find the right fund house for yourself is the one where the expense ratio is low and the past performance of the fund house is excellent.

The Method of Investment

Now that you have understood hybrid fund meaning, chosen the type of hybrid fund and the fund house, it is time to choose the method of investment. There are principally two ways in which you invest in hybrid funds: through lump-sum investment or through SIP. In lump sum investment, you deposit a large chunk of money at once in the hybrid fund. One of the benefits of lump-sum investment is that if the Net Asset Value (NAV) of the fund is low at that point, you can buy a large number of units.

SIP, on the other hand, refers to Systematic Investment Plan. If you choose to invest in hybrid funds via SIP, the best part about it would be that you can keep investing on a monthly or weekly basis by paying a fixed but small amount. You can start with as low as Rs 500 for a month. This way, your investment will keep going on and you will not have to worry about the lack of funds for investment.

After understanding the complete meaning of hybrid funds, with these simple steps, you will be able to invest in hybrid funds without any difficulty. However, it is important to note that the minimum amount of investment for both lump sum and SIP methods varies from one fund house to another as well as according to the NAV of the fund.

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