Which hybrid mutual funds should you choose?
To compare between balanced funds and equity savings funds, as long as you have an adequate investment horizon and risk appetite, balanced funds may be the better choice
The India growth story remains attractive, but the market is in a fair valuation range. The decision to allocate towards equity is easier when the market is at a relatively cheap valuation level. At this juncture, it is advisable to do a judicious allocation to equity and debt according to the risk appetite and horizon of the investor. The allocation to equity (high volatility-high return) and debt (low volatility-low return) can be done either a) through focused allocation to equity and debt funds, or b) through hybrid funds where the fund manager maintains the ratio between equity and debt. Here’s a look at the parameters that one should compare between the two categories of funds.