Is it the right time to increase exposure to hybrid funds?.
5paisa Research Team
29th October 2021 - 03:42 pm
In the last three months, the asset under management (AUM) of funds dedicated to the Hybrid category has increased by 13%.
When the equity market is trading at a lofty valuation, most of the investors either book profit or do a rebalancing of their portfolio. Nevertheless, some investors do not disturb their existing investment or portfolio and invest the additional amount towards hybrid funds. These are the funds that invest in a mix of equity, debt and other commodities also such as gold. In the last three months ending August 2021, asset under management (AUM) of funds dedicated to the Hybrid category has increased by 13%.
|
AUM of Hybrid Funds |
|
|
|
|
|
Category |
Jun-21 |
Jul-21 |
Aug-21 |
Increase |
|
Conservative Hybrid Fund |
14,563.55 |
17,079.50 |
17,378.04 |
19.3% |
|
Balanced Hybrid Fund/Aggressive Hybrid Fund |
1,31,474.85 |
1,35,589.18 |
1,40,797.39 |
7.1% |
|
Dynamic Asset Allocation/Balanced Advantage Fund |
1,19,262.08 |
1,22,591.86 |
1,41,492.63 |
18.6% |
|
Multi Asset Allocation Fund |
16,072.70 |
16,432.03 |
17,059.05 |
6.1% |
|
Arbitrage Fund |
94,840.95 |
1,08,177.88 |
1,08,251.29 |
14.1% |
|
Equity Savings Fund |
11,379.89 |
12,031.15 |
13,135.98 |
15.4% |
|
|
3,87,594.01 |
4,11,901.60 |
4,38,114.38 |
13.0% |
|
Source: AMFI |
|
|
|
|
The highest increase in AUM in absolute terms was observed in the Dynamic Asset Allocation/Balanced Advantage Fund. They saw an increase of almost 19% in their AUM in the last three months. This is considered to be the best and most suited category in an uncertain market. As opposed to static allocation funds, the dynamic funding mechanism of the category helps the fund to be in a better position to exploit the opportunity.
Conservative Hybrid Fund also saw more than 19.3% growth in their AUM albeit at a lower base. These funds are suited for a conservative investor as they have major exposure to debt and lower exposure to equity.
Looking at the current market situation and different options available within the hybrid fund, investors may go for it. They can choose the right hybrid fund category depending upon their risk profile. These funds will help you to diversify your investment and also lower investment risk along with better portfolio management.
Tanushree Jaiswal