Best JM Financial Hybrid Mutual Funds

JM Financial Mutual Fund was incorporated in 1994 as a subsidiary of JM Financial Ltd, a long-standing financial service provider in India with a rich pedigree. Over the years, they have been involved in many financial services for institutions and investors, managing total assets worth over Rs.8700 crore. 

JM Financial Mutual Fund offers over 14 mutual fund schemes, including equity, arbitrage, debt, liquid, and hybrid funds. 

Hybrid mutual funds invest in multiple asset classes, including equity, debt and sometimes even gold or real estate. The equity portion offers higher returns than a regular debt fund, while the debt portion reduces portfolio risks. It helps create a balanced portfolio, offering steady income to investors with long-term capital appreciation. The best JM Financial hybrid mutual funds usually provide solutions for different investment objectives and risk preferences.

Hybrid funds let people invest in multiple non-related asset classes, balancing equity and debt. Each hybrid fund is different, so they are suitable for people with varying levels of financial goals and risk tolerance. 

There are, in total, six different types of the top JM Financial hybrid mutual funds. Conservative schemes generally invest 75 to 90% of their total assets in debt instruments and the rest in equities, while aggressive funds invest 65 to 85% in equities. For arbitrage funds, the fund manager can optimise the returns by buying and selling stocks to benefit from price discrepancies in different markets. Multi-asset allocation funds have to invest in an extra asset class apart from equity and debt. Dynamic asset allocation funds are truly dynamic and can shift their investment from 100% debt to equities. Another type to consider from the best JM Financial hybrid mutual funds is an equity savings scheme, which invests 65% in stocks and the rest in debt and arbitrage.

Taxability

JM Financial Mutual Fund offers over one hybrid mutual fund scheme. But, before buying the best JM Financial hybrid mutual fund, an investor might want to know about its taxability. 

Long-term Capital Gains Tax: Equity-oriented hybrid funds with more than 65% equity component are taxed like equity funds at 10% rate. Debt-based funds are treated as a pure debt MF, and gains are taxed @ 20% after indexation or 10% without indexation benefits. 

Short-term Capital Gains Tax: STGC on equity-based funds are taxed at 15%. The capital gains get added to one’s taxable income for debt-oriented funds and charged per the tax slab rate. 

TDS: No TDS is charged on capital gains from hybrid funds. However, dividend pay-outs crossing Rs.5000 attract 10% TDS.

Factors to Consider Before Investing

Besides taxability, there are several factors to consider before deciding the best JM Financial hybrid mutual funds:

Risks: Hybrid funds carry risks that are proportionate to the asset allocation. The risk mainly depends on the equity portion of the portfolio, and the returns can vary depending on the market performance of such assets. A more debt-oriented fund will have less volatility involved but will be vulnerable to credit, interest rate, and inflation risks. It’s a good idea to analyse even the best JM Financial hybrid mutual fund to understand its risks.

Returns: Hybrid funds don’t guarantee returns. The stock market’s performance decides the returns by the equity component of investments. Usually, equity-based schemes deliver higher returns against significant volatility. On the other hand, debt-oriented funds offer more stable and moderate returns.  

Holding analysis: This parameter is essential as it provides a basic idea about the level of returns and scale of losses to account for. 

Financial goals: The best JM Financial hybrid mutual funds for an investor depends on their financial goals. A pensioner or an investor with medium-term goals might prefer a conservative fund to avoid losses. On the other hand, an aggressive fund might be better for those with a long-term goal. 

Expense ratio: A high expense ratio can reduce the return on investment. If the expense ratio is too high, even a high NAV growth might yield low returns. 

Investment tenure: Hybrid funds work well for investors willing to wait for some time to earn healthy ROI. Equity-based hybrid funds perform well as long-term investments, while debt-based funds are suitable for a mid-term horizon like 3 to 5 years. 

Role of the fund manager: The fund manager is responsible for allocating funds in various equity and debt instruments. They also buy and sell assets whenever the market conditions are favourable. The best JM Financial mutual funds are managed by fund managers who understand the market well. It’s always a good idea to check fund managers’ past performance to reflect on returns in the long run. 

Investment strategy: Investors might want to evaluate their preferred risk tolerance and return requirements carefully. For example, an aggressive scheme offers a higher return rate than conservative funds and carries significant risks. The combination of assets, the proportion of each asset type, and the fund manager’s investment style will affect the returns. 

An investor might want to carefully consider the above points before investing in the best JM Financial hybrid mutual funds 2022. Studying the basics of a hybrid mutual fund is a good starting point for new investors.