Dynamic hybrid funds: Why should you invest in these mutual funds?
hybrid funds which are sub categorised further into balanced advantage funds and multi asset funds. The dynamic asset allocation pattern of these funds has immensely attracted investors due to the design which ensures better risk mitigation. The pandemic induced market fall in the early part of 2020 did set a strong foundation for these two categories when investors were concerned about the correction in the markets and clueless about the direction the markets would take from there.
Balanced advantage funds (BAFs) invest in a dynamic mix of equities, arbitrage opportunities and debt instruments to take advantage of the opportunities offered by these instruments, yet offering the taxation advantage of equities. Similarly multi asset funds (MAFs) invest in a dynamic mix of equities, arbitrage opportunities, debt instruments and commodities (predominantly gold in the case of most AMCs). These categories of funds bode well for conservative investors who have lesser appetite for risk or lack experience in equity investing and so wish to take only moderate exposure into equities.
The category of dynamic asset allocation funds or balanced advantage funds hold Rs. 2.49 lakhs crores of AUM and multi asset funds hold Rs.67000 crores as on 31st March 24. Just 4 years back in March 2020, the AUM of balanced advantage funds was just Rs.77,100 crores and a mere Rs.
9439 crores for multi asset funds. This is a more than 3 times growth of AUM for balanced advantage funds and over 6 times surge for multi asset funds. The numbers more than display the growing faith of investors on these schemes.
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