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balanced equity oriented

What is a hybrid equity fund

Hybrid equity funds or hybrid equity-oriented funds are hybrid mutual funds that, unlike debt funds, invest most of their corpus into equity and equity-related instruments. As per the guidelines provided by the Securities and Exchange Board of India (SEBI), aggressive hybrid funds should invest 65% to 80% of their total assets into equity-related instruments. The rest is invested in debt instruments. Further, a fund house can offer either a balanced hybrid fund or an aggressive hybrid fund, but not both.

Hybrid equity fund growth

All mutual fund investments come on two flavours – Growth and Dividend. Hybrid equity fund growth option invests back all the profits into the fund, resulting in a quicker rise in the value of your mutual fund. A dividend option, on the other hand, pays out the dividend to the investor's bank account periodically. Remember that a dividend from a hybrid equity fund is given out from the NAV of the fund, and results in a corresponding drop in the NAV.

Factors to be considered while investing in a hybrid equity fund

Here are some of the factors you should consider when selecting a hybrid equity fund to invest in:

Why should you invest in hybrid equity funds?

Despite being named aggressive hybrid funds, these type of funds is among the safest equity investments one can make. These are ideal for beginners and for investors looking to increase their equity exposure without taking up high risk. Investors looking to build a large corpus of funds can opt for a hybrid equity fund, growth option.