What is Hybrid/Balanced Fund?

A balanced fund, also known as a hybrid fund, is a type of investment fund that combines both equity and debt investments in a single portfolio. Balanced funds typically invest in a mix of stocks and bonds to provide investors with a diversified investment portfolio.

The objective of a balanced fund is to provide investors with a combination of capital appreciation and regular income by investing in a balanced portfolio of equity and debt securities. The equity component of the portfolio provides the potential for long-term capital appreciation, while the debt component provides regular income and helps reduce the overall portfolio risk.

Balanced funds may have different investment strategies, such as investing in a particular sector, geography or market capitalization. Some balanced funds may also focus on ethical or sustainable investments, such as socially responsible investing or impact investing.

Investors in balanced funds can benefit from professional management, diversification, and liquidity. However, balanced funds are subject to market risk, credit risk, and interest rate risk. It's important for investors to understand their investment objectives and risk tolerance before investing in a balanced fund.