Balancing Between Debt And Equity

The importance of allocation to various asset classes—equity, debt, gold etc.—comes to the fore in times of volatility. At present, the equity market is volatile, and the debt yields have been moving up. Allocation to various asset categories can be done through hybrid funds. According to the fund classification norms by the Securities and Exchange Board of India (Sebi), there are six types of hybrid funds. Let us focus on aggressive hybrid fund, previously known as balanced funds and see its advantages. The quantum of money being managed by various hybrid funds gives us an idea of their popularity. As on May 31, 2022, the AUM in the six hybrid funds was Rs 4.83 lakh crore. Of this, balanced advantage funds, aggressive hybrid funds and arbitrage funds accounted for Rs 1.8 lakh crore, Rs 1.45 lakh crore, and Rs 1 lakh crore, respectively. The other three have relatively...