Aggressive Hybrid Funds Plan

By -


Aggressivehybrid funds fall in the category of hybrid schemes. These take exposure to both debt and equity securities in proportions specified in the scheme’s investment objective. As compared to plain vanilla balanced funds, these funds have differences in asset allocation. In case of balanced hybrid funds, the fund manager is not allowed to take advantage of arbitrage opportunities. In arbitrage, he/she buys securities at a low price in one stock exchange and sells them at a higher prices in the other. Gains accrue as a result of the price differential of the same security in different market.

The autonomy and choice of investment options available to aggressive hybrid funds is much higher than balanced hybrid funds. Aggressive hybrid funds enjoy the flexibility to take advantage of arbitrage opportunities available in the market. These funds have to allocate at least 20% of fund assets towards debt instruments. The investment in equity and equity related instruments varies between 40% to 60% of fund’s assets. The manner of stock selection varies from growth to value. Similarly, selection of debt securities differ from being highly sensitive to low interest rate sensitive.

Who should invest in Aggressive Hybrid Funds?

These funds aim at generating current income along with wealth accumulation over the long-term via a hybrid portfolio composition. These funds may be perceived as yielding higher returns at a relatively higher risk than standalone balanced hybrid funds. The fund manager attempts to provide consistent returns by investing primarily in equity and a small portion in debt and money market instruments. Such funds are best suited to investors who have a moderate risk appetite and medium-term investment horizon of at least 5 years to 7 years.

The budding investors who are new to volatility associated with the stock market may give these funds a try. Even within the same category, the level of risk among funds may vary depending upon the presence of mid-cap and small-cap stocks. However, while picking funds for investing, use analyse both quantitative and qualitative aspects of the fund.




Comments

Post a Comment

Popular posts from this blog

Which term insurance plan is best for you?

By -
  Which term insurance plan is best for you? In today's world, where things can be uncertain, making sure your family has enough money for the future is really important. That's where term insurance plans come in handy. They're an easy and not-too-expensive way to make sure your loved ones have enough money if something happens to you. If you live in Nagpur, it's especially important to pick the right term insurance plan, and having a trustworthy insurance agent or advisor in Nagpur can really help. In this article, we'll talk about the different types of term insurance plans available and help you figure out which one might be the best for your situation. Level Term Insurance: One of the simplest and most widely chosen types is level term insurance. With this plan, you pay a fixed amount of money for a certain period, like 10, 15, 20, or 30 years. Many people in Nagpur like this type because it's easy to understand. If you happen to pa...
Read more

Six sip secrets you should know.

By -
  Six sip secrets you should know. Mutual fund investing has long been regarded as one of the best strategies for long-term wealth growth. Like many other Indian cities, Nagpur is seeing an increase in the number of people using mutual funds to reach their financial objectives. By using a systematic investment plan (SIP), you can invest in mutual funds in one of the most well-liked and convenient ways possible. However, there are a few SIP secrets that, when understood and used, can drastically affect the results of your mutual funds. We'll go into these six SIP secrets in this blog and examine how they can affect your financial journey, with a particular emphasis on Nagpur and the significance of a mutual fund advisor in Nagpur. Consistency is key - Systematic Investment Plans, or SIPs, encourage investors to make consistent, recurring investments. This methodical strategy makes sure that you invest a set amount of money at regular intervals, usually once a mo...
Read more

Sip or Buying a DIP? Which is better?

By -
  Sip or Buying a DIP? Which is better? Investors have access to a wide range of tactics and methods for investing in the financial markets. The SIP (Systematic Investment Plan) and the DIP (Buying the Dip) are two widely used techniques. The decision between the two tactics depends on a number of elements, each of which has advantages and disadvantages. With a focus on the setting of SIP investment in Nagpur, India, and the function of a financial advisor or investment planner in Nagpur, we will examine the contrasts and advantages of each technique in this article. Let's start by discussing SIP investments. A SIP is an investment strategy in which a person makes fixed investments in mutual funds or exchange-traded funds (ETFs) at predetermined periods, generally monthly or quarterly. The rupee cost averaging that SIP provides is its main benefit. The impact of market volatility is reduced because the investment is spread out over time. By using a systematic approach, investor...
Read more