How to choose the right Hybrid Fund?
Once the investor has defined his SMART financial goal, he can choose from the following categories of hybrid funds, according to his risk profile:
- Conservative Funds: These are for risk-averse investors, with at most 25% of the corpus being invested in equity, and the rest in fixed-income securities. They are fairly stable and investors can derive periodic income from them.
- Moderate Funds: They invest almost equally in both debt and equity instruments, with the risk element slightly higher than the conservative funds, due to higher exposure to equities.
- Aggressive Funds: These funds invest almost 65-80% of their corpuses in equity and the remaining in debt, and are highly suitable for young investors looking for capital appreciation by bearing higher risk.
