Hybrid Fund To be safer than equities, and more volatile than either of the equity funds. Don’t fall for such claims. The amount of volatility in mutual funds can vary depending on a number of factors, including market sentiment, and at times, one of these categories can be more volatile than the other. All mutual funds carry some kind of investment risk and hence, investors should consult them financial advisor To make investment decisions based on their risk tolerance.
debt mutual funda debt fund A mutual fund is a mutual fund that invests in fixed income securities and other debt related instruments. Out of its total assets, a debt fund can invest a minimum of 65% to 80% in bonds, corporate securities, treasury bills, commercial papers, etc. The investment objective of debt funds is to offer regular income while protecting the investor’s capital.
Equity Mutual Fund
An equity scheme is an open-ended mutual fund that invests the majority of its investible corpus in stocks. Equity funds can be further classified on the basis of market cap, sectoral/thematic and tax saving. These funds are known to have high risk-return tradeoffs and can offer massive capital appreciation in the long run.
Hybrid Mutual Funds
Hybrid fund is a mutual fund scheme that spreads its assets in equity and debt. Also known as Balanced Fund, the fund manager of Hybrid Fund Allocate assets to both equity and debt instruments based on investment objective and allocation strategy. Hybrid funds can be further classified as equity oriented and debt oriented. Equity-oriented hybrid funds primarily invest in equities whereas debt-oriented hybrid funds primarily invest in debt and debt-related instruments.
Key Differences Between Hybrid, Equity and Debt Funds
| parameters | Hybrid Fund | equity fund | debt fund |
| allotment |
Equity and Fixed Income Instruments | Stocks and other equity related instruments | Invests in money market instruments, commercial papers, certificates of deposit, corporate securities, government bonds, etc. |
| return on investment |
Returns are subject to the performance of the underlying securities | Returns are subject to interest rate risk and credit risk | Returns are subject to market-related risks |
| risk profile |
Hybrid funds can have a low to high risk profile depending on the asset allocation | Debt funds have a low to moderately high risk profile | All Equity Mutual Funds carry very high risk |
| liquidity | It depends on whether you invest in Equity Oriented Hybrid Fund or Debt Oriented Hybrid Fund | Debt funds with longer average portfolio maturity have higher liquidity as compared to debt funds with longer average portfolio maturity | All equity funds (except ELSS) offer high liquidity |
| investment horizon |
Ideal for investors with an investment horizon of three to five years | Generally considered by investors for short term investment (though not limited to) | Ideal for investors with an investment horizon of five years or more |
| tax benefit |
Hybrid fund investments do not offer any tax benefits | There is no tax exemption in debt funds | ELSS (Equity Linked Savings Scheme) is a mutual fund that comes with tax benefits where the investor can invest up to Rs 1.5 lakh in every financial year and can claim tax exemption on the amount invested. |
Axis Triple Advantage Fund
Open ended scheme investing in Equity, Debt and Gold
investment objective
The scheme seeks to generate long-term capital appreciation by investing in a diversified portfolio of equity and equity related instruments, fixed income instruments and Gold Exchange Traded Funds.
benefits
- It is a 3-in-1 investment option or asset allocation fund that helps you to diversify your money across three asset categories – Equity, Debt and Gold.
- Allows investing in gold, which is one of the most popular options among Indian investors, and a good hedge against macro events.
- Builds long-term wealth through investing in equities and protects against market volatility through debt investments. Hence, providing stability.
- The fund periodically rebalances your portfolio by selling an asset that has performed well and buying an asset that has underperformed. This increases the potential for an increase in the average return of the investment.
- A single application is sufficient for investing in three asset classes.
Axis Triple Advantage Fund
(Open ended scheme investing in Equity, Debt and Gold)
*Investors should consult their financial advisors if in doubt about whether the product is suitable for them or not.
Mutual fund investments are subject to market risks, read all the documents related to the scheme carefully.