June 07 , 2012
Mutual funds in India are allowed to invest in three asset classes - equity, debt and gold. They are currently not permitted to invest in real estate directly. Hybrid mutual funds are those who have two or more of these three asset classes in their portfolio. They are designed to customize the portfolio to individual investor needs and their risk.
There are two main types of hybrid funds that are popular. One is the monthly income plan - a great retirement tool. The other is the balanced fund - it can be used by a younger, working professional class. Both these combine equity and debt in different proportions. Newer hybrid funds are also emerging, that combine gold with equity or debt.