Karan is a new investor and wants to invest in funds which are low on risk and provide good returns. So Yojak explains the concept of Hybrid funds to him.
Hybrid funds, also known as balanced funds or asset allocation funds, are mutual funds that invest in both debt and equity to achieve the perfect blend of healthy diversification and good returns.
The equity component helps to ride the equity wave and at the same time the debt component provides a cushion against extreme market turbulence.
New investors who are eager to take exposure in equity markets, can think of hybrid funds as the first step.
The choice of hybrid fund depends on your risk preferences and investment objective and are ideal for a mid-term investment horizon of 5-7 years.
An attractive investment option, Karan takes Yojak’s advice and decides to invest in Hybrid Mutual Funds.