Mutual Fund Corner: SWOT analysis of hybrid funds

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In 2018, when market regulator the Securities and Exchange Board of India (SEBI) undertook the reclassification of mutual fund categories, the erstwhile balanced funds was split into 6 distinct categories which have varying risk appetites and the name was changed to hybrid - because they have a mix of equity and debt. R Sivakumar, Head-Fixed Income, Axis AMC and Anupam Tiwari, Fund Manager-Equity, Axis AMC spoke to CNBC-TV18 to talk about flows into hybrid fund in the month of June, and do a SWOT analysis of hybrid funds.

In 2018, when market regulator the Securities and Exchange Board of India (SEBI) undertook the reclassification of mutual fund categories, the erstwhile balanced funds was split into 6 distinct categories which have varying risk appetites and the name was changed to hybrid - because they have a mix of equity and debt.
The hybrid universe itself is a little shy of Rs 4 lakh crores but growing consistently. In June itself, there was a big bump up in flows compared to the previous months. In fact, on a month basis, more money is coming into the hybrid category compared to the mainstream equity funds.
R Sivakumar, Head-Fixed Income, Axis AMC and Anupam Tiwari, Fund Manager-Equity, Axis AMC spoke to CNBC-TV18 to talk about flows into hybrid fund in the month of June, and do a SWOT analysis of hybrid funds.
On June flow Sivakumar said, “I think there is an element of investors choosing not to be in one category either pure debt or pure equity and in choosing to come to hybrid funds essentially what you are doing is you are diversifying the risk. So obviously specially if there are concerns on equity valuation or performance etc. this is one place where to look for.”
“Last several months, several quarters hybrid funds have been seen momentum so this is just a follow through and it doesn’t really show a flip or a change in investor behaviour necessarily away from let us say equity funds into hybrid. So hybrid as a category are really seeing demand on their own.”
Anupam Tiwari, said, “If you are really a long term investor and you can go through the volatility, yes, absolutely fine there is no need for a hybrid product in that sense. But generally you will not find any investor who will be able to do 100 percent of his investment like that.”
For full interview, watch accompanying video